Trademark, Copyright + Advertising

The potential defensive value of a registration on the Supplemental Register is highlighted in a recent opinion of the Trademark Trial and Appeal Board, In re Morinaga Nyugyo Kabushiki Kaisha.  While we often think of trademarks on the Supplemental Register as less valuable and “junior” in significance, this case reminds us that Supplemental Registrations may bar registration of a mark applied for on the Principal Register on the ground of likely confusion. Applicant Morinaga Nyugyo Kabushiki Kaisha sought to register the mark MT. RAINIER THE MOUNTAIN OF SEATTLE EXPRESSO & MILK and Design (Serial No. 86/338,392) on the Principal Register for a variety of milk and expresso beverage and food items. The USPTO issued a final refusal on the basis of likely confusion with two registered marks for coffee owned by Mount Rainier Coffee Company, located in Puyallup, Washington:  the MOUNT RAINIER COFFEE COMPANY & Design mark and MOUNT RAINIER COFFEE COMPANY (word mark). The word mark registration is on the Supplemental Register, and the MOUNT RAINIER COFFEE COMPANY & Design mark is on the Principal Register, with a disclaimer of exclusive rights to “MOUNT RAINIER COFFEE COMPANY.” Applicant argued that “[g]ranting broad protection to the word portion of the cited registrations would essentially nullify the effect of choosing to register the word mark on the Supplemental Register and eviscerate the disclaimer in the word-plus-design Principal Registration.” Applicant further quoted the observation by Professor McCarthy in his trademark treatise that it is “strange and unsettling” for the USPTO to cite a Supplemental Registration as a bar to an application for registration on the Principal Register. The Board in Morinaga addressed this argument by saying “however strange it may appear to Applicant,” longstanding and binding precedent of the Federal Circuit supports this result. Indeed, prior rulings of the Court of Customs and Patent Appeals have held that a mark registered on the Supplemental Register is “a mark registered in the Patent and Trademark Office” and may therefore be cited as a bar to registration under Section 2(d) of the Trademark Act.  In re Clorox Co., 578 F.2d 305, 198 USPQ 337, 340 (CCPA 1978).  The Clorox ruling was confirmed in Towers v. Advent Software Inc., 913 F.2d 942, 16 USPQ2d at 1042:  “likelihood of confusion can be found even if a term is merely descriptive and does not identify source:  Registration on the Supplemental Register is sufficient, and a showing of trade identity rights in the form of secondary meaning is unnecessary.” According to the Board in In re Morinaga, the MOUNT RAINIER COFFEE COMPANY mark may, at least at the time of registration, be primarily geographically descriptive, but that does not mean that it is incapable of achieving acquired distinctiveness.  In addition, registering a mark on the Supplemental Register is not an admission that a mark has not acquired distinctiveness, and neither the Trademark Trial and Appeal Board nor the Supplemental Registrant is bound by such an “admission.” Bottom of the coffee cup:  Refusal stands based upon a primarily geographically descriptive mark registered on the Supplemental Register, barring registration of a similar mark for closely related goods. In re Morinaga also involved an interesting issue concerning refusal of registration on the ground that a mark is primarily geographically deceptively misdescriptive under Section 2(e)(3) of the Lanham Act. When we think of coffee, many consumers are apt to think of Seattle, mostly likely because of the strength of the Starbucks brand and its origins in that city.  The Examining Attorney had issued a final refusal of registration on the additional ground that the word “SEATTLE” is featured in the mark and, as such, the mark is geographically deceptively misdescriptive because the goods do not originate from that location.  This determination was made by narrowly focusing on the presence of the word “SEATTLE” in the mark without considering its context in reference to “Mt. Rainier” as “The Mountain of Seattle.”  On appeal to the TTAB, Applicant argued that the Examining Attorney improperly dissected the mark and should have instead focused on the context in which the word “SEATTLE” appears, referring to the city’s proximity to Mt. Rainier, rather than indicating the source of origin of the goods.  The TTAB agreed, holding that under Section 2(e)(3), the “determination of the geographic misdescriptiveness must be based on consideration of the whole mark.”  Accordingly, the refusal under Section 2(e)(3) was reversed by the Board. Had the Examining Attorney maintained and made final a refusal of registration under Section 2(a) of the Trademark Act, the test is different and may potentially have had a better leg to stand on.  The test under Section 2(a) allows dissection of a mark – “No trademark by which the goods of the applicant may be distinguished from the goods of others shall be refused registration on the principal register on account of its nature unless it…consists of or comprises…deceptive…matter….”  (emphasis added)  Section 2(a) allows a more narrow focus on the allegedly deceptive matter in a mark, whereas Section 2(e)(3) focuses on the mark as a whole. Bottom of the Coffee Cup:  A word within a trademark should be analyzed in context.  If the word dominates the commercial impression of the mark as a whole and would be perceived by consumers as indicating the geographic origin of the goods, a refusal on the ground that the mark is primarily geographically deceptively misdescriptive may stand if the goods identified in the application do not in fact originate in the geographic area.

Does a food label advertising a product as “all natural fruit” mislead consumers when that product contains artificial preservatives?  That is the question presented in Brazil v. Dole Food Co. Inc., which the Court of Appeals for the Ninth Circuit answered with a definitive “maybe.”   The Court reversed the district court, sending the plaintiff’s claims to a jury.  The case highlights the potential importance of the FDA’s informal policies for food products.  The case also serves as a reminder that companies should keep in mind how consumers may understand an ad and not just focus on a literal reading of the words. The lawsuit started in 2012, when plaintiff Chad Brazil filed a class action suit against Dole in the Northern District of California, asserting a number of legal theories.   By the third amended complaint, Mr. Brazil left in play only California state law claims, which nevertheless implicated federal labeling requirements because California has adopted federal food regulations as its own standard.  Mr. Brazil’s remaining claims revolved around whether Dole mislabeled certain fruit products as “All Natural Fruit” when the products also contained artificially-made preservatives.  Most of these claims require the plaintiff to prove that the accused labels likely misled a significant chunk of reasonable consumers.  The district court granted summary judgment for Dole, viewing Mr. Brazil’s own testimony as his only evidence of deception and citing that only a few instances of actual deception are insufficient to survive summary judgment.  The district court also expressly discounted the FDA warning letters about alleged mislabeling that Mr. Brazil proffered.  The FDA has informally defined “natural” as “nothing artificial or synthetic…has been included in, or has been added to, a food that would not normally be expected to be in the food.”  The district court agreed with Dole that these warning letters did not address whether the particular artificial additives at issue would normally be expected in Dole’s products. The Ninth Circuit reversed summary judgment on these claims, seeing more potentially supporting evidence for deception than Mr. Brazil’s testimony.  Mr. Brazil proposed to use the label itself and Dole’s own survey evidence as additional support, but the Court emphasized the proffered FDA warning letters.  Mr. Brazil cited warnings letters to food sellers of “natural”-labeled products that did not--unlike Dole’s argument--rely on whether the offending constituent is normally expected in the food.  One letter in particular warned of labeling tomato products (which naturally contain citric acid) as “natural” when they also contained artificial citric acid. Mr. Brazil’s “misleading consumer” claims will may be headed for trial, unless the case settles before then.  While the Ninth Circuit affirmed that Mr. Brazil cannot seek damages on behalf of a class, he still stands to win his individual damages and an injunction if successful at trial. This case offers a couple key take-aways.  First, food sellers might want to keep tabs on the FDA’s informal stance on issues relevant to the seller’s business, particularly warning letters.  Fortunately, the FDA’s website publicly posts warning letters, with several choices as to the search field (including by company and subject).  The Ninth Circuit’s opinion indicates at least a willingness to allow this sort of information as evidence to support a consumer deception claim. Second, companies should bear in mind how consumers might take the wording in advertisements – whether in label form or otherwise.  In this case, Mr. Brazil testified that he understood Dole’s labels to mean that each product in its entirety was free of artificial additives.  Though the labels stated “All Natural Fruit,” the court denied Dole’s attempt to axe Mr. Brazil’s claims for alleging that something other than the fruit was not natural.

Life may not be bowl of cherries for Mr. Trump’s presidential campaign these days.  It’s more like a bowl of Skittles, as that is exactly what landed Team Trump in a copyright infringement suit filed in Chicago federal court on Tuesday. It all started last month when Donald Trump Jr. tweeted this picture on behalf of the Trump campaign: As it turns out, the copyright in the photograph is apparently owned by Mr. David Kittos, a U.K. photographer who posted the photo to his Flickr account back in 2010. (In a rather bitter twist of irony, Mr. Kittos was a child refugee from the Republic of Cyprus).  He obviously soured on the tweet and submitted a DMCA "take down" to Twitter, which complied with its obligations and removed the Skittles pic.  By that point, though, Mr. Kittos' photograph had been liked and retweeted thousands of times. He registered his work with the U.S. Copyright Office, and asserted claims for direct and indirect copyright infringement against Donald J. Trump for President, Inc., Donald Jr., Donald Sr., and even Veep Candidate Michael Pence.  Mr. Kittos seeks actual damages, disgorgement of Defendants' profits, and injunctive relief.  (There is no claim to statutory damages or attorney’s fees because Mr. Kittos registered his work after the act of infringement occurred). The Complaint raises a number of potentially interesting issues. First, it’s not entirely clear whether Plaintiff has viable copyright claims against Donald Sr. or Governor Pence.  Neither candidate appears to have directly participated in the act of infringement.  Moreover, there does not appear to be facts to suggest that the running mates had the right to control how Donald Jr. used or operated his personal twitter account. Second, is the photograph sufficiently original to receive copyright protection?  Plaintiff explains how he exercised artistic judgment in selecting the angle, lighting, and "randomly placed" the candies into the bowl thereby "allowing their bright and boastful colors to become the centerpiece of the image."  Given that a "dash" of creativity suffices for copyright purposes, the Court is unlikely to be bowled over by a lack of originality argument. Finally, what about fair use?  There is a recent case out of the Northern District of California where the Court held that reproducing a candidate's "head shot" photograph in a blog post was fair use as a matter of law, even at the pleading stage.  That Court's analysis turned largely on the fact that: (1) Defendant used the Plaintiff's head shot photo in a blog post that was "critical" of Plaintiff's politcal views; and (2)  the Plaintiff had no evidence to suggest the market value of her head shot photograph was adversely affected.  Here, Trump Jr. did not use the picture to criticize or comment on Skittles.  Moreover, Plaintiff has alleged that he licenses his photographs, so there is a potential argument that the market value of Mr. Kittos' work could be adversely affected.  Thus, it seems unlikely that fair use will win the day, at least at this early stage of the pleadings. This tweet of sweets has come back to haunt Team Trump this Halloween season.  They will likely answer or file a motion to dismiss sometime this holiday season.  With any luck, we might know where this case is headed by Presidents' Day.  

An advertising slogan like "A Diamond is Forever" may be eternal, but the same cannot be said about some comparative advertising claims.  If a company advertises its product as superior to a competitive product, the ad claim may need to be re-assessed and potentially modified or withdrawn if the competitor upgrades or begins selling a new product. The risks of not updating advertising claims become even greater if a company advertises that its product is better than all other competitive products in the market, thereby dramatically expanding the range of products that should be monitored to determine if the ad claim is still true. This lesson was recently brought home to the manufacturer of Dyson vacuum cleaners in a case brought against it in Massachusetts federal court by competitor SharkNinja. SharkNinja Operating LLC v. Dyson Inc. et al. In July 2013, Dyson launched an advertising campaign for its DC41 vacuum model, claiming that it had "twice the suction of any other vacuum" on the market. In July 2014, however, SharkNinja released a new Shark Lift-Away vacuum that the company claimed rendered Dyson's "twice the suction" claim no longer true. Dyson continued making the "twice the suction" claim in 2014 for the DC41 model as well as an additional DC65 product model. SharkNinja's counsel sent protest letters to Dyson about the ad claim in May and July 2014, in advance of and after the Lift-Away product launch, without providing test results to back up its assertions of false advertising. In the meantime, Dyson commissioned internal and independent third-party testing of the products at issue in July and August 2014. In September 2014, SharkNinja provided Dyson with its own third-party test results that showed the Dyson models did not have "twice the suction" of the SharkNinja’s Lift-Away. Dyson conceded during the litigation that the launch of the Shark Lift-Away product rendered its "twice the suction" claim literally false as of July 2014.   Nevertheless, it was not until November 2014 that Dyson began "stickering over" the disputed ad claim on product packaging in retail stores.  Dyson argued that this constituted prompt, commercially reasonable steps to remove the advertising claim from the marketplace once it realized the ad claim had become "stale". Not surprisingly, SharkNinja disagreed. It contended that Dyson dragged its feet, resulting in products remaining in the market bearing the disputed suction claim until early 2015, hindering SharkNinja’s sales growth. On a motion for summary judgment, the court found Dyson liable for false advertising as of July 2014. It rejected Dyson's argument that "commercially reasonable efforts" to remove the ad claim constitutes a valid defense to liability. As the court held, "an advertiser that puts a claim into the marketplace bears all of the risk of the claim being false or becoming stale. An approach that allowed such an advertiser to continue to benefit from false or stale claims, so long as reasonably commercial efforts were undertaken to remove the advertising, would not adequately disincentivize the behavior prohibited by the Lanham Act or foster vigilance about the accuracy of advertising claims. Further, it would unfairly shift the cost of stale or inaccurate claims from the sponsor of such claims to its competitors, as long as the sponsor made reasonable efforts to remove the claims." The court entered judgment on the motion for SharkNinja on the issue of liability, with issues pertaining to damages (including causation and Dyson's willfulness) to be proven at a later trial. Dyson had also brought a counterclaim against SharkNinja about an unrelated advertising claim, and the court denied Dyson's summary judgment motion on the counterclaim due to threshold factual disputes about what message was communicated by the ad claims challenged by Dyson. The lesson for Dyson and other advertisers is that comparative advertising claims must be monitored to determine whether they continue to be substantiated after a competitor has upgraded an existing product or released a new model that renders a specific product comparison or "marketplace" superiority claim untrue. Once an advertising claim has been rendered false by subsequent events, an advertiser should move quickly to remove the claims, even those appearing on product packaging at retail stores. More practically, if a company has reason to believe that a comparative advertising claim may have a short "shelf life", it may be best to make those claims only on easily-changed websites and digital ads or on point-of-sale material that can be withdrawn or discarded quickly at lesser expense than a change to product packaging.

Simon Tam and The Slants now have a gig at the biggest judicial venue in the country:  The U.S. Supreme Court.  On September 29, 2016, the Court decided it will take the case of Lee v. Tam. At issue in the case is whether Mr. Simon Tam is entitled to a federal trademark registration for the name of his all Asian-American rock band, “The Slants.”  The Trademark Trial and Appeal Board denied the registration holding that such a name would be disparaging to Asian Americans.  A panel of the Federal Circuit upheld that decision.  Late last year, however, the full Federal Circuit reversed that panel decision and found that denying Mr. Tam his registration was an unconstitutional content-based restriction. Ms. Michelle Lee, the Director of the USPTO, petitioned SCOTUS to take the case and presented the following question for the High Court’s consideration back in April:  “Whether the disparagement provision in 15 U.S.C. 1052(a) is facially invalid under the Free Speech Clause of the First Amendment.”  We will soon know the answer.  

In a previous post, we discussed Louis Vuitton’s unsuccessful lawsuit against My Other Bag, Inc., in which the “parody defense” was a key issue. Louis Vuitton is making trademark law news again – this time as a defendant/counterclaim plaintiff in a trademark infringement suit in federal court for the Southern District of New York, LVL XIII Brands, Inc. v. Louis Vuitton Malletier S.A. et al.  In this latest action, Louis Vuitton was more successful, obtaining the dismissal of all claims against it, although its counterclaims for infringement of its famous “LV” Monogram mark were rejected. As the court playfully put it, the case involved “two fashion companies go[ing] toe-to-toe over the right to affix a metal plate to the toe of ‘luxury’ men’s sneakers.”  Plaintiff LVL XIII (pronounced “Level 13”) is a start-up company that designed and manufactured a luxury men’s sneaker containing a rectangular metal toe plate with the inscription “LVL XIII” (the “TP”).  After LVL XIII’s sneakers hit the market in the fall of 2013, LVL XIII allegedly discovered that a Louis Vuitton footwear product also released in 2013, the “On the Road” sneaker, used a metal toe plate similar to that on the TP.  LVL XIII commenced a lawsuit for infringement on June 30, 2014, and Louis Vuitton asserted counterclaims asserting that the LVL XIII marks infringed the LV Monogram mark. On September 13, 2016, in a carefully-reasoned 107-page decision, the court granted each party’s summary judgment motions on the other’s claims, and denied LVL XIII’s motion on its own claims, resulting in the dismissal of all claims in the lawsuit.  Despite the length of its opinion, the court didn’t really think this case was a close call – at least not with respect to LVL XIII’s claims.  Nonetheless, the opinion contained some interesting nuggets, discussed below. Expert Exclusion Before addressing the parties’ summary judgment motions, the court granted Louis Vuitton’s motion to preclude LVL XIII’s expert, a law professor retained to testify on the issue of secondary meaning with regard to the TP. There were three reasons for the exclusion of the expert.  First, while the expert may have had expertise in certain areas of fashion history and intellectual property law, it was not established how this would qualify him to testify “as to the central, and largely empirical, issue” of whether the TP had acquired secondary meaning.  Next, the expert’s opinion rested upon an unsubstantiated assumption – that LVL XIII’s customer base was “urban males” – rendering his opinions irrelevant and unreliable.  Finally, the expert’s methodology was not reliable because it could not be tested or challenged, in part because the expert had failed to properly document his research.  The court also criticized the expert’s failure  to conduct a consumer survey, indicating that, while a secondary meaning survey might not be an absolute requirement, it is the “most persuasive” evidence, making it difficult to prove secondary meaning without one. Unusual USPTO Application History  A further interesting aspect of this case is the unusual prosecution history of the TP trademark application.  LVL XIII had filed a “design mark” application with the USPTO for the TP in March 2013. The USPTO had issued a Notice of Publication in August 2013 and a Notice of Allowance in October 2013, without ever requiring proof of the distinctiveness of the mark. However, on July 18, 2014, following the submission of a Statement of Use with accompanying product specimen, the USPTO issued an office action refusing registration. The office action required LVL XIII to amend the description of the mark to indicate that it is “in fact a three dimensional configuration of a feature of the goods.” LVL XIII was also directed to disclaim the non-inherently distinctive design of the rectangular shape of the TP on the ground that “product design can never be inherently distinctive as a matter of law” and is thus not registrable on the Principal Register without sufficient proof of acquired distinctiveness. What made the prosecution history interesting is that the USPTO had actually accepted LVL XIII’s Statement of Use on July 15, 2014, a mere three days before the USPTO reversed itself and declined to approve the application for registration. Perhaps the USPTO belatedly realized that LVL XIII’s mark was in fact a three-dimensional product configuration, and that the applicant needed to either disclaim the design of the rectangular shape of the TP or prove that the design had acquired distinctiveness.  This appears to be the correct determination – what is surprising is that the USPTO took so long to reach it, and that it had to reverse itself three days after accepting LVL XIII’s Statement of Use. Product Design v. Packaging and the Need to Prove Secondary Meaning The court’s decision also contained a useful review of the distinction between product design and product packaging.  Louis Vuitton had argued that the TP was product design trade dress, which is “not protectable absent a showing of secondary meaning.”  LVL XIII, on the other hand, contended that the TP was either “a conventional trademark or, alternatively, product packaging, either of which can be held inherently distinctive.”  Applying Wal-Mart Stores, Inc. v. Samara Bros., 529 U.S. 205 (2000) and its progeny, the court held that the TP was product design. According to the court, product packaging is generally limited to the appearance of labels, wrappers and containers used in packaging a product. Further, the court accorded weight to the ultimate determination of the USPTO that the rectangular shape of the shoe toe plate is a “configuration of a feature of the shoe design,” which “can never be inherently distinctive as a matter of law.” As the court wittily concluded, despite LVL XIII’s efforts to “shoehorn” the TP into the trademark or product packaging categories, “it did not fit.” Thus, to prevail on its Lanham Act claims, LVL XIII was required to show that the TP had acquired secondary meaning. Social Media Evidence of Secondary Meaning In a sign of the growing influence of social media and its potential relevance to secondary meaning, the court also addressed LVL XIII’s claims that it could prove secondary meaning through social media evidence even in the absence of traditional paid advertising.  However, the court found that LVL XIII had failed to offer proof of the existence, let alone success, of a social media-based marketing plan.  Moreover, in the court’s words, “even if LVL XIII had adduced evidence of a substantial online following, that would not support secondary meaning, because LVL XIII has not identified a single post highlighting the TP as an indicator of source.”  Whether a party that offers evidence of a social media-based advertising campaign highlighting the trademark as an “indicator of source” could prove secondary meaning in the absence of any traditional advertising is still an open question. Louis Vuitton’s Counterclaims Finally, as mentioned above, the court also ruled on Louis Vuitton’s counterclaims, concluding that that use of the LVL XIII word mark was not likely to cause confusion with Louis Vuitton’s well-known “LV” Monogram mark (the “Initials Logo”).  In doing so, the court rejected Louis Vuitton’s claim to “a broader exclusive right to use the non-stylized ‘LV’ letter combination,” holding that “although the Initials Logo is strong in its stylized form, that does not mean that [Louis Vuitton] has the ‘exclusive right to . . . [every] variation’ of the ‘LV’ initials.”  In light of this language narrowing the scope of protection for the famous LV Monogram mark, Louis Vuitton might have had second thoughts about whether it was worth asserting the counterclaims, or whether it should have just defended the weak infringement claims asserted against it by LVL XIII.

What is the difference between an advertisement that is literally false by necessary implication and one that is impliedly false? It may seem like a fine (and somewhat opaque) distinction, but determining the particular way in which an advertising message is false can have a significant impact on the evidence required to establish liability for false advertising. The Court of Appeals for the Second Circuit recently issued an opinion involving this distinction in a case involving home pregnancy test kits. Church & Dwight Co. v. SPD Swiss Precision Diagnostics GMBH.  We blogged about this case last week, focusing on the court’s threshold determination that the Food, Drug and Cosmetic Act (FDCA) did not preclude the plaintiff’s Lanham Act false advertising claims. This post focuses on the court’s analysis of liability. By way of background, SPD’s packaging and advertising for its Clearblue Advanced Pregnancy Test with Weeks Estimator represented that the product could provide information about how many weeks a pregnancy had advanced. The product was capable of estimating the length of pregnancy since the date of last ovulation. This is not the standard metric commonly used by the medical profession to describe how long a woman has been pregnant. The standard metric relies on the weeks elapsed since the woman’s last menstrual period. The crux of Church & Dwight’s claims was that the packaging and advertising for SPD’s Clearblue product communicated the false message that the products used the same metric and gave information about the same number of weeks of pregnancy as would be provided by a medical professional. Church & Dwight challenged SPD’s Launch Packaging and Advertising, as well as Revised Packaging. Among other things, the word “ovulation” did not appear on the front or back of the Launch Package. The Launch Advertising included a two second “ESTIMATED WEEKS SINCE OVULATION” supertitle on the screen. After the launch, FDA took the position that SPD had violated a clearance letter the agency had issued during the pre-market approval process with respect to approved labeling and advertising. In response, SPD revised the packaging and advertising. The Revised Packaging included a gray strip in the top right corner of the package with the phrase “Only Test that Estimates Weeks Since Ovulation” with an asterisk link to the Indications for Use Statement on the side panel. The Second Circuit affirmed the district court’s holding that the Launch Packaging and Advertising were both literally false by necessary implication as well as impliedly false. What is the difference? As the court explained, a statement can be deemed “false by necessary implication” even without an express statement of falsity, if the advertisement’s “words or images, considered in context, necessarily and unambiguously imply a false message.” The requirement that the statement be unambiguous is the key to understanding the category of literal falsity by necessary implication. In other words, some interpretation of the advertisement is required, but there is only one unambiguous interpretation that can be made. And since there is only one unambiguous implied message, there is no need to show by market research survey evidence or evidence of an intent to deceive that the buying public was in fact misled by the advertisement. In contrast, an advertising representation may be found “impliedly false” if the challenged statement is ambiguous and therefore “susceptible to more than one reasonable interpretation.” In that case, extrinsic evidence of consumer confusion or evidence of an intent to deceive would be required to establish liability. Here, the appellate court concluded that the Launch Packaging and Advertising “unambiguously implied the false message that the [SPD] Product provides a measurement of weeks-pregnant that is consistent with the measurement a doctor would provide.” The Second Circuit also affirmed the district’s court’s back-up ruling that the Launch Packaging and Advertising was impliedly false, based on evidence of actual consumer confusion and SPD’s intent to deceive. The Second Circuit further affirmed the holding that the Revised Packaging was impliedly false. Even though the Revised Packaging featured language that the Product measured weeks pregnant since ovulation, Church & Dwight submitted persuasive survey evidence that 16.0 to 17.3% of respondents believed the Products provided the same estimate of weeks pregnant as a doctor’s estimate. It can be difficult to predict with certainty whether a court will find a challenged advertising statement to be “literally false by necessary implication” or impliedly false. Therefore, it is always helpful to present survey evidence showing how the relevant consumers perceived the advertisement at issue in order to have at “two bites at the apple” of establishing liability. But if a plaintiff can convince the court that the advertising message is unambiguously false, then regardless of the survey results obtained or any attacks on the validity of the survey design, the plaintiff can still prevail.

Zara USA, Inc., the affiliate of the Spanish fashion retailer, has been hit with a class action lawsuit in federal court in California advancing a relatively simple and novel set of theories.  Rose v. Zara USA, Inc. Plaintiff, represented by counsel Mark Geragos, contends that Zara lures customers into purchases of its clothing and accessories by failing to disclose the true price in U.S. currency in a bait-and-switch scheme.  The claim includes two sub-theories summarized in the following allegations: Clothing Tagged Only in Euros (“Bait-and-Switch Pricing”): Many of Zara’s products are tagged only with a euro price. This alone is confusing to many consumers and lures them to the register. Compounding matters, not only is the same product sold for a substantially higher amount in dollars, but the product is always sold well in excess of the true converted amount if the euro price on the tag were properly converted to dollars. Euro Price Covered with Dollar Sticker (“Cover-Up Pricing”): In those instances where Zara includes a price in dollars, the dollar amount is almost always applied in the form of a pricing label affixed over the euro price actually printed on the tag. In this context, the dollar amount similarly is far in excess of the true converted amount if the euro price printed on the tag were properly converted to dollars. For reasons that are far from clear, the Complaint includes color photos of the Duchess of Cambridge Kate Middleton, Kim Kardashian and Brittny Gastineau with their Zara shopping bags.  It does not appear that Plaintiff is alleging that these celebrities were similarly deceived -- these photos are perhaps inserted for dramatic effect. Although more questionable claims have been allowed to proceed past a motion to dismiss in California courts, we predict that these claims will be summarily dismissed on a motion to dismiss. Here is a brief analysis why. Zara’s business practice might be unconventional and annoying to the consumers, but it does not follow that such a practice rises to the level of a violation of California law or the law in any other jurisdiction.  Analyzing the claims according to the legal requirements of each cause of action, there is no reason a court should allow these claims to continue. First, there are a few obligatory “junk” legal claims in the Complaint that are ill-fitted for this case, including negligence and negligence per se.  Those claims are included in an apparent effort to make this a nationwide class, since all jurisdictions recognize these common law theories, and a Zara shopper in another state may theoretically join the class.  The problem for plaintiff is that no court in the country would likely view the conduct alleged here as being negligent or negligent per se.  Both legal doctrines are designed for purposes other than protecting consumer rights.  Every state has its own consumer protection statute (similar to California’s as discussed below) and it is those remedies that govern consumers’ rights, not broad and amorphous concepts of common law negligence. As with virtually every consumer class action filed in California, the core statutory claim is Cal. Bus. & Prof. Code § 17200, the Unfair Competition Law.  This statute prohibits business practices that are “unfair,” “fraudulent” or “illegal.”  Neither of the two theories alleged here come close to meeting any of these standards. As for the first theory, the so-called “bait and switch” pricing by expressing the price in euros instead of dollars, although perhaps annoying to a customer, one can readily determine that they will have to make some sort of inquiry concerning the U.S. currency price at the time of purchase.  There is no deception because any consumer will understand that, to put it in a quasi-algebraic expression,  € ≠ $.  A retailer should be able to use whatever conversion rate they deem appropriate at the time of sale, inform the consumer of the current U.S. price and allow him or her to make up their mind on the purchase.  The fact that this may be an inconvenience to some consumers does not mean that there is a violation of any legal standard or statute.  The conduct is not unfair or fraudulent according to the cases that have interpreted those terms under the statute. The second theory seems even more farfetched.  Plaintiff contends that some of the items have a price sticker stating a U.S. dollar amount, but under that sticker is an original price expressed in euros. Plaintiff alleges that, according to an exchange rate that he is using—presumably the exchange rate for the date of purchase—the dollar price is too high. The core problem with this theory is that the original euro price is immaterial to the transaction.  It is not illegal, under statutory or common law, for a retailer to use a price tag to cover an original price such that the new tag has a price that is either higher or lower than the original price. For a moment, set aside the currency question because that really is irrelevant.  The claim here is that one cannot increase the price of an item of clothing or other merchandise by placing a sticker over the original tag with a higher price.  That’s a spurious claim.  Although consumers more typically see a sticker that is placed on the original price reflecting a price reduction, there is no rule or regulation that prevents a retailer from increasing the price.  The price tag that the customer sees reflects the retailer’s price on that particular day, and here it is expressed in dollars, not euros.  Again, there is no deception here. A Word to the Wise.  Notwithstanding the fact that these claims are unlikely to proceed past a motion to dismiss, the case offers a reminder that consumer deception in the retail context creates a significant risk of liability.  Even in scenarios that involve mere consumer confusion, surprise or an arguably sharp practice, the cost of defending these claims can be costly. The Complaint cites a number of state statutes that prohibit, through a variety of formulations, the concept of bait-and-switch, as well as 16 C.F.R. 238 et seq., a federal regulation on bait advertisements. California law similarly prohibits “[c]harg[ing] an amount greater than the lowest price posted on the commodity itself or on a shelf tag that corresponds to the commodity . . .”  Cal. Bus. & Prof. Code § 12024.2(a).  There are a host of other regulations, some specific to various types of products, that should be considered in avoiding class action lawsuits arising from retail transactions. Retailers—even those who do not use euros to indicate prices on goods offered for sale—should take heed of these and similar consumer protection statutes that may form the basis for a costly, even if defensible, class action. Kent Schmidt is a partner in Dorsey’s Litigation Group. He is the author of Left Coast Law, a blog that discusses the legal environment in California and its impact on businesses, residents and consumers.

R&B sensation Beyoncé can go back to promoting her album Lemonade now that a federal court held that a copyright claim against her was nothing but a lemon.  While the decision may seem a bit tart to the plaintiff, it is a solid example of how one cannot squeeze scène à faire into a viable copyright claim.  Have we got your juices flowing yet?  Read on to hear why Beyoncé got this claim bounced. The plaintiff, Matthew Fulks, is an independent filmmaker and creative director of a 7 minute short film entitled “Palinoia,” which is about “the pain of a tumultuous relationship.”  Earlier this spring, Fulks soured when Beyoncé and her entourage released a 58 minute film to promote her 6th album, Lemonade.  The film tells the story of an African-American woman’s journey from heartbreak to healing.  According to Fulks, Beyoncé’s promotional film copied several scenes from Palinoia. Fulks sued for infringement, and Beyoncé moved to dismiss. The Hon. U.S. District Court Judge Jed Rakoff—no stranger to presiding over juicy IP disputes—sided with Beyoncé.  Although Judge Rakoff observed that “substantial similarity” is often a factual question, he noted that it can be decided by the Court in instances where the similarity between two works concerns only non-copyrightable elements of the plaintiff’s work.  This was such a case. There were 9 different examples of alleged visual similarities.  The Court addressed each one and explained how the plaintiff’s expression constituted unprotectable ideas or common stock elements that could not be the basis for a copyright infringement claim.   The Court’s analysis is particularly instructive because screen shots of each of the visual similarities is incorporated into the opinion and then analyzed separately, allowing the reader to easily track the Court’s analysis. For example, take the following “Graffiti and Persons with Head Down” comparison: These scenes do share some similarities (heads down with faces hidden, both characters in a state of “distress”, graffiti on a white background, and both scenes “shot from the left”).  But, as the Court observed, a “state of distress” is an unprotected idea.  Moreover, it flows naturally and necessarily that a distressed character would be leaning (as opposed to dancing) against something stable (as opposed to delicate) and that his or her head would be down (as opposed to up).”  Finally, the fact that both scenes were “shot from the left” was nothing more than an unprotected idea. If you are looking for an excellent, recent example of the scène à faire doctrine in action, Fulks v. Beyonce is worth your time.

On September 9, 2016, the Court of Appeals for the Second Circuit issued an interesting decision in a false advertising case involving a dispute between competitors in the home pregnancy testing market. Church & Dwight Co. v. SPD Swiss Precision Diagnostics GMBH. The opinion addressed whether the Food, Drug and Cosmetic Act (FDCA) precluded the plaintiff’s Lanham Act false advertising claims and also confirmed the standards for liability applicable to statements that are expressly false, false by necessary implication and impliedly false. This post will focus on the FDCA claim preclusion aspects of the Second Circuit’s opinion. SPD’s packaging and advertising for its Clearblue Advanced Pregnancy Test with Weeks Estimator represented that the product could provide information about how many weeks a pregnancy had advanced. The product was capable of estimating the length of pregnancy since the date of last ovulation. This is not the standard metric commonly used by the medical profession to describe how long a woman has been pregnant. The standard metric relies on the weeks elapsed since the woman’s last menstrual period. The crux of Church & Dwight’s claims was that the packaging and advertising for SPD’s Clearblue product communicated the false message that the products used the same metric and gave information about the same number of weeks of pregnancy as would be provided by a medical professional. The district court found that SPD had deliberately set out to deceive consumers into believing that the Clearblue products would provide a measure of weeks pregnant consistent with what doctors provide, and held SPD liable for false advertising under several different theories. The court issued an extremely broad injunction that included the required removal of current products from points of sale; prohibition of use of such terms as “weeks pregnant” and “Weeks Estimator”; a corrective notice delivered to retailers and distributors; and further corrective notices to be made available at trade shows, professional meetings, on SPD’s website and YouTube channel and in internet banner advertising. The Second Circuit affirmed. No Preclusion of Lanham Act Claims The first issue addressed in Church & Dwight was whether the U.S. Supreme Court’s June 2014 decision in POM Wonderful LLC v. Coca-Cola applied to a home pregnancy test classified as a Class II medical device by FDA. POM Wonderful held that Lanham Act false advertising claims asserted against juice beverage products were not precluded by the FDCA because the two federal statutes were complementary. As the Supreme Court observed, competitors will have an awareness of unfair competition practices that “may be far more immediate and accurate than that of agency rulemakers and regulators;” the Lanham Act draws upon this “market expertise.” Significantly in POM Wonderful, the products at issue – Minute Maid Juice Blends – are not subject to an FDA pre-approval process for sales and advertising. Rather, for beverages, FDA relies on after-the-fact enforcement actions. Because FDA does not necessarily pursue all violations, the Supreme Court deemed it necessary to preserve the ability of competitors to protect their commercial interests and the public against false and misleading claims. After the POM Wonderful decision was rendered, commentators immediately observed that the holding was likely to be applied to other product categories regulated by FDA. And so it was in Church & Dwight. The Second Circuit held that POM Wonderful was “controlling” on the issue of preclusion, even though there were material differences in the way in which FDA regulates beverages vs. home pregnancy tests.  As a Class II medical device, SPD’s home pregnancy test required the submission of a “premarket notification” to FDA under Section 510(k) of the FDCA, including proposed labeling, so that FDA could determine if the device was “substantially equivalent” to an existing authorized device. In the case of the Clearblue product, FDA issued a “hold letter,” expressing concern that the “weeks” indicator feature could provide misleading information to users. After SPD made changes to its labeling in negotiation with FDA, the agency issued a “clearance letter” that specifically required SPD to use certain labeling language and a conversion chart that would clarify how a doctor would date a woman’s pregnancy as compared with the product’s test results. FDA also specified that SPD could only advertise its products as providing information about “weeks since ovulation” rather than weeks pregnant. SPD argued on appeal that POM Wonderful was distinguishable based on the more intensive, premarket approval regulatory process applicable to home pregnancy kits and the fact that FDA had issued a clearance letter with specific instructions on how the Clearblue products should be marketed. The Second Circuit rejected these arguments, stating: “The fact that the FDA has satisfied itself that a product’s labeling is sufficiently accurate to secure FDA approval gives no assurance that the intervention of a competitor would not reveal problematic misleading messaging that is harmful to the competitor’s interest, which the federal agency either overlooked or failed to appreciate as important.” The court further noted that POM Wonderful had explicitly rejected the argument that a claim would be precluded to the extent the FDCA or FDA regulations specifically required or authorized aspects of a label later challenged under the Lanham Act because “FDA’s requirements are a floor, not a ceiling.” Having determined that Church & Dwight’s claims against SPD were not precluded by the FDCA, the court went on to address the district court’s findings of liability for false advertising. Stay tuned for Part 2 of this post!

Sid Bernstein was a legendary promoter and producer of iconic rock-and-roll performers including the Rolling Stones, the Moody Blues and, of course, the Beatles.  Bernstein earned his moniker as “The Man Who Brought the Beatles to America” after arranging for the Beatles to play in New York’s Carnegie Hall and Shea Stadium in the 1960’s.  Sid Bernstein Presents, LLC, an assignee of the late promoter's intellectual property, recently sued Apple Corps Ltd., an entity created by the Beatles, for ownership of the footage of the famous concert at Shea in 1965. Shea Stadium was once home to the New York Mets baseball team and until the Beatles came in 1965, no concert had ever been played within its giant blue walls.  Bernstein’s idea was to use the stadium and its 50,000-plus seats as a music venue to cash in on “Beatlemania.”  He convinced the Beatles to play at Shea and claims to have arranged all the concert’s details, including paying the Beatles a guaranteed minimum fee.  A film crew captured the Beatles’ iconic performance that day and the footage was subsequently turned into a film named “The Beatles at Shea Stadium.” In a complaint filed in U.S. District Court for the Southern District of New York, Sid Bernstein Presents claims ownership of the 51 year-old footage and alleges Apple Corps infringed upon Bernstein’s work by broadcasting that footage and by creating infringing derivative works.  The timing of the lawsuit might seem long, long, long overdue, but this week Ron Howard’s new movie about the Beatles - Eight Days A Week - is scheduled to be released containing footage of the 1965 show at Shea. The complaint notes that Apple Corps’ subsidiary is the registered owner of the copyright in “The Beatles at Shea Stadium” movie.  But Bernstein alleges authorship of the underlying footage “[b]y reason of being the producer of and having made creative contributions to the 1965 Shea Stadium performance, as well as being the employer for hire of the Beatles and the opening acts, who performed at his instance and expense.” Bernstein’s complaint notes that the Copyright Office refused its application for registration of the underlying footage earlier this year.  According to the complaint, Bernstein never actually had possession of the underlying footage it claimed to author, so it submitted stills from the “The Beatles at Shea Stadium” movie as the deposit work for its copyright application.  The Copyright Office concluded that Bernstein’s claim in the underlying footage was “adverse” to Apple Corps’ 1988 registered copyright in Shea Stadium movie, and that the stills of the movie provided in the application represented “infringing” works of the movie. After being turned away by the Copyright Office, Bernstein now asks the federal court for a judgment declaring Bernstein as the “dominant and sole author” of the concert footage and the owner of all copyrights in “The Beatles at Shea Stadium” movie.  It may soon be up to the court to determine where this long and winding road finally comes to an end.

After visiting Rio to experience the Olympic Games a few weeks ago, I still feel like a winner.  One athlete who won big in Rio was Usain Bolt, who took home three medals in three Track and Field events during the Games this year.  Over the years, Bolt has built an impressive list of accomplishments: the title of the “World’s Fastest Man” and the fastest human ever timed, nine Olympic medals won over three consecutive Olympic Games, the 100 meter dash world record, and . . . two U.S. trademark registrations of himself “bolting.” “Bolting” is the name of Bolt’s signature pose where he leans back with one arm to the sky and the other pulled back by his ear, which makes his body look a little like the shape of a lightning bolt.  In 2010, Bolt successfully registered two versions of his Bolt pose in the U.S. Patent and Trademark Office. So, how was Bolt able to obtain trademark registrations for his signature pose? A trademark is defined as any word, name, symbol, or device or any combination thereof used by an individual to identify and distinguish the individual’s products or services from those manufactured or sold by others, to indicate the source of the products or services.  Shapes, sounds, fragrances, and colors, though not enumerated in the trademark statute, are potentially registrable as trademarks if they are distinctive and non-functional. Physical poses and the actual physical configuration of body parts do not qualify as trademarks in the abstract  (although certain poses or physical movements could potentially be copyrightable, for example in ballet choreography).  However, the stylized silhouette or image of a person striking a pose can be protected under trademark law if used as a symbol or logo to identify the source of a product or service.  Here, Bolt obtained his trademark registrations by turning the silhouette of himself “bolting” into a symbol used to identify the source of the goods and services listed in his trademark applications.  Among the goods Bolt claims to sell under his Bolt design are hand-held electronic games, books and signage, clothing, athletic gear, sports equipment, and sports drinks.  The services that Bolt claims to offer under the Bolt design are, among others, “entertainment and sporting and cultural activities, namely personal appearances by a sports celebrity.” Athletes have been creative in leveraging their icon status into personal brands for years.  But a personal brand is a broader concept than a trademark that is registrable for specific goods and services. Only recently have athletes used federal trademark registrations to protect their individual brands. In contrast, on the corporate front,  Nike has owned U.S. trademark registrations for the “Jumpman” symbol, which was derived from a picture of Michael Jordan while dunking, since 1989.  More recently, some individual athletes have trademarked their signature nicknames (“King James”) and catchphrases (“Beastmode”).  Other athletes have fashioned and trademarked the names of their signature pose to build a personal brand, such as Tim Tebow and his “Tebowing” and Colin Kaepernick and his “Kaepernicking.”  Bolt, however, has taken his branding a step further and obtained federal trademark registrations for  his name, his catchphrases, and his signature pose. As athletes become more creative in developing their personal brands, they will likely seek additional ways to commercialize and protect an investment in their brands.  Perhaps this could lead to new legal precedent which would allow athletes to protect their signature dance or iconic ritual, such as LeBron James’ signature chalk toss which he does before each game - but likely only if these are attached to the sale of goods and services. Like the track and field records that Bolt has shattered over the years, so too may the bounds of trademark law be pushed to new limits.

In a landmark decision that departs from previous case law, the Court of Justice of the EU, the highest court of the EU, held that a website operator that posts hyperlinks to another site that contains copyright materials posted without the right holder's consent could itself be liable for copyright infringement. The facts of the case The case in question, GS Media v. Sanoma Media Netherlands, concerned a complaint by the Dutch publisher of Playboy magazine against the posting of hyperlinks in GS Media’s popular Dutch website to third party websites where a number of photographs commissioned by Playboy magazine were available to be illegally downloaded. The Playboy publisher requested GS Media to remove the links several times. It even managed to cause third party websites to remove the photographs from their own sites. However, a defiant GS Media continued to provide new links to other websites where the photographs were available for downloading. Eventually, the photographs were published in Playboy magazine itself. The legal issue – what is “communication to the public” The decision turns on the interpretation of the concept of “communication to the public” in EU copyright law harmonized under legislation dating to 2001. The ruling is binding on all member states of the EU. In a previous case (Svensson of 2014), the EU court held that the posting of a hyperlink to a website where the copyright works are already generally available to the public does not amount to “communication to the public” and therefore does not infringe the rightholder’s rights. This was based on the notion that “communication to the public” of a work that is already available electronically (through broadcast or satellite services or the internet) requires an act by which the copyright material is communicated to a “new public”. The court held in Svenssen that providing a link to a website where the materials are already available does not communicate the content to a “new public”. The GS Media decision distinguished the Svensson decision on the basis that its reasoning applied to cases where the copyright material was available on the third party website with the rightholder’s consent. The court considered that the position is different where the rightholder did not authorise the use of the materials on that other website. When does the posting of a hyperlink amount to copyright infringement? According to the decision in GS Media, two key factors determine whether the posting of a link to unauthorized materials on a third party website constitutes “communication to the public”: Where the person providing the link is doing so without seeking to make a profit (that is, as a non-commercial activity) the posting of the hyperlink would constitute “communication to the public” (and therefore an infringement) only if that person knew or ought to have known that the materials were protected by copyright and made available on the third party website without the rightholder’s consent. Where, on the other hand, the person provides the link as part of a for-profit activity, he should be expected, according to the decision, to carry out the “necessary checks” to ensure that the copyright materials on the website to which the hyperlink leads were posted legitimately with the right holder’s consent. Otherwise, there is a presumption against the person posting the hyperlink that he knew the materials were infringing. The EU court noted the importance of maintaining a balance between the interests of right holders and the importance of providing a high level of protection to copyright materials, on the other hand, and the interests of free speech and the free circulation of information on the internet on the other. The court also acknowledged the importance of hyperlinks to the free circulation of information through the internet and the objective difficulties that anyone who wishes to ascertain the legitimacy of copyright materials posted on a third party website would face. Nevertheless, the court considered that those concerns should only be taken into account when hyperlinks are used for non-profit purposes. Hence, in those cases, the infringement turns on the knowledge or deemed knowledge of the person providing the link. By contrast, if the link is provided as part of a for-profit activity, the burden lies on the person providing the links to ensure that the works are legitimately posted on the third party website. However, despite the anti-commercial sentiment expressed in the court’s decision, the distinction between for-profit and not-for-profit activities is not as significant as it may seem. The decision made it explicitly clear that in any event (whether or not the link is provided as part of a for-profit activity) rightholders should have the right to notify the operator of a website that provide links to materials on third party websites that those materials were posted illegally and that it should be able to take action against the website operator if it refuses to remove the link. In other words, even if the link is provided as part of a not-for-profit activity, once the website operator is notified of the infringement the continued use of the hyperlink will constitute an infringement. The practical ramifications The decision in GS Media creates a new form of copyright infringement. Essentially, it is a new judge-made form of secondary infringement. The court tilted the balance heavily against commercial activities by placing the burden on the operator to establish non-infringement before placing the hyperlink. However, even a not-for-profit website will infringe once it has actual or deemed knowledge of the infringement. For rightholders, the decision establishes a new route for copyright enforcement. So far, rightholders could pursue websites that posted unlicensed materials and could issue take-down notices to hosting services that host such websites. In some countries (such as the UK) an additional remedy is available to require ISPs to block the infringing site. Now right holders will be able to send take-down notices to any website operator if it provides links to infringing materials on third party sites and they will be able to seek damages from the operator if it refuses to remove the links to the illegal materials (as long as none of the copyrighted defences apply and as long as the right holder can establish the underlying infringement). Hyperlinks are used in many websites, primarily by media and news-oriented sites, which provide numerous links as part of their wider content offering and within articles and other content. Links are also provided by search engines which provide the links as their main product. Both categories offer the links as part of their commercial profit making activity. As such, they are particularly vulnerable to potential liability for copyright infringement under the new rule. The decision in GS Media, therefore, makes all major news and media companies and all search engine operators overnight into potential mass infringers of copyright due to the provision of hyperlinks on their websites. Infringements will only occur where hyperlinks lead to infringing materials on third party sites, but website operators and search engines now have the burden to ascertain that each hyperlink they provide does not lead to infringing content. Effectively, this means that all such website operators will have to readdress their take-down and screening processes in order to minimize the risk of liability in relation to links provided to third party websites. Many site operators will have to weigh the benefit of incorporating links to third party sites against the extra costs of dealing with take-down notices and putting in place proper screening procedures and systems for clearing rights. The likely result may be a significant reduction in the use of hyperlinks by media organisations. In regard to search engine services, it is only a matter of time before a case is brought against Google to test the applicability of the new liability theory under the GS Media decision to the search results provided by the search engine. Google (and other search engines) will undoubtedly argue that the new rule does not apply to them because they only provide an algorithm to search the web – they do not provide links to other websites. It is the search, they will argue, that triggers the list of links, not the considered decision of the search engine operator. A distinction could be drawn, however, between paid-for links (“ads” or “sponsored links”) which are placed by the search engine in consideration of payments, and “natural results” generated by the algorithm. The search engine’s position would be more difficult to defend where it accepts payment in consideration of placing the link. Further, it could be argued that where Google is paid for allocating “adwords” it is agreeing to placing links to the paying websites higher up the list of results. If the logic of the MS Media decision is to be followed, in such circumstances it should be Google’s responsibility to ensure that the linked website does not contain infringing materials. The Court of Justice of the EU is not averse to departing from its own decisions (as the MS Media case itself demonstrates) and at least in the area of copyright it appears willing to engage in judicial creativity. With that in mind, it is entirely possible that the law might change once again the next time this issue comes before the court.

Section 43(a) of the Lanham Act is generally considered a broad-based vehicle for asserting false advertising claims. For the owner and operator of the Trump Hotel Las Vegas, however, the statutory section was not broad enough to encompass alleged falsehoods in a flyer circulated by a culinary workers union attempting to unionize the Hotel. A federal district court in Las Vegas granted a motion to dismiss the lawsuit on the ground that the challenged statements did not constitute commercial advertising or promotion. Trump Ruffin Commercial LLC v. Local Joint Executive. The dispute arose when candidate Trump visited Las Vegas in October 2015 during the Republican primary. Because the Trump Hotel Las Vegas did not have a large enough space to host a campaign event, Trump's speech took place instead at the Treasure Island Hotel. The union distributed a flyer accusing Trump of staying at the Treasure Island, a union hotel offering higher wages and better health insurance rather than staying at the Trump Hotel Las Vegas, which the hotel workers were trying to unionize. Contending that the flyer was an attempt to damage the reputation of the Trump Hotel Las Vegas, the plaintiffs brought suit for false advertising under Section 43(a) of the Lanham Act and deceptive trade practices under Nevada state law. According to the court, to state a claim for false advertising, the challenged statements must not only be allegedly false, with a tendency to deceive, the statements must also have been made in "commercial advertisement or promotion." To meet this standard, the allegedly false statement must be: (1) commercial speech; (2) by a defendant who is in commercial competition with plaintiff; (3) for the purpose of influencing consumers to buy defendant's goods or services; and (4) the representations must be disseminated sufficiently to the relevant purchasing public to constitute "advertising" or "promotion" within the industry. Here, the plaintiffs failed to state a claim because the Complaint merely alleged that the union's statements were "designed to call attention to the [labor] dispute" and intended to harm the Trump Las Vegas Hotel. Having dismissed the Lanham Act claim, the court declined to exercise supplemental jurisdiction over the Nevada state law claim. The lesson of the case? Section 43(a) was just not huge enough for the Trump Hotel plaintiffs.

While all the world might be a stage, the famous U.K. fashion house Burberry Limited has now established that none of its players – except Burberry – has the right in the U.S. to use the famous Burberry trademark as a stage name.  That’s the upshot of a decision issued by a Manhattan federal court in mid-August in the case of Burberry Limited v. Moise, No. 1:16-cv-05943-ER-GWG. Perry Paris Moise is an American hip hop producer and singer who decided, inexplicably, to adopt the stage name “Burberry Perry,” and he also decided to use that name as the title for his self-titled EP issued in May 2016.  It is not at all uncommon for musical artists to associate themselves, whether in videos, photos or song lyrics, with well-known fashion brands.  After all, Jennifer Lopez had a smash hit with “Louboutins,” and, according to a 2013 compendium, there are at least 28 rap songs named after clothing brands.  So, then, what’s the big deal with “Burberry Perry”? Well for starters, there aren’t many artists who have adopted a famous brand name as their stage name, and there are even fewer that have decided to use a trademark like Burberry, whose use dates back to 1856 in the U.K. and is substantially unique.  Making matters worse for Moise, his album cover used a variation of the famous Burberry plaid print and its equestrian logo, which could only be indicative of an intent to associate himself with the fashion house whose name he’d appropriated for himself.  It’s therefore no surprise that Burberry sued, and it’s also no surprise that Moise, rather than defend the case, defaulted and quickly announced that he had changed his stage name to “The Good Perry.”  (One wonders what the well-known country music act “The Band Perry” thinks of this new name, but that would be a blog post for another day.) So does this Burberry decision mean that any performer who picks a stage name that happens to be the same as or similar to a well-known trademark is out of luck?  Not necessarily.  Those of us of a certain age will recall the 1991 film “New Jack City” and its song “Lyrics 2 the Rhythm,” which was recorded by the singer Tamara Hutchinson, who used the stage name “Essence,” and was produced by Joseph Saddler, better known as Grand Master Flash.  Unfortunately for Saddler and Ms. Hutchinson, her stage name drew the wrath of Essence Communications, publisher of the well-known Essence magazine.  Essence Communications sued Saddler and Ms. Hutchinson seeking to stop her from using “Essence” as a stage name, but that effort was rejected by the same New York court that ruled in favor of Burberry a few weeks ago.  Why?  Primarily because the court found that “essence” was a word used as all or part of a trademark by many others, and that Ms. Hutchinson had made no effort to associate herself with the magazine of the same name.  See Hutchinson v. Essence Communications, 769 F. Supp. 541 (S.D.N.Y. 1991). So, Ms. Hutchinson won her case because the facts concerning her adoption and use of “Essence” were more favorable to her than the brand owner.  Unfortunately for Ms. Hutchinson, notwithstanding that she won this battle, no other songs by “Essence” recorded after 1991 turn up in online searches, so it would appear that Essence Communications wound up winning the war.  Perhaps “The Good Perry” will find that his new name is a harbinger of greater success in the music business.

Legendary rockers Jimmy Page and Robert Plant are probably still flying high over their defense verdict earlier this summer in the “Stairway to Heaven” copyright infringement trial.  They may be slightly coming down, though, after the trial court rejected their claim for recovery of attorneys’ fees.  The trial court’s ruling is one of the first to interpret the U.S. Supreme Court’s decision in Kirtsaeng v. John Wiley & Sons, Inc., a case that clarified the standard for awarding fees to the successful party in a copyright dispute.  The following is a brief explanation of why the stores are all closed for Zeppelin’s fee claim. As we previously reported here, Kirtsaeng directs district courts to give “substantial weight” to the objective reasonableness of the losing party’s position, while also cautioning courts against treating this factor as dispositive.  Instead, the trial court is to examine “all the circumstances of a case on their own terms, in light of the Copyright Act’s essential goals.” There have been relatively few district court decisions issued since the Supreme Court offered this guidance.  Earlier this month, the trial judge in the Zeppelin case weighed in on the issue. In deciding whether to award attorney fees to the defendants, Judge Klausner considered and applied both the principles set forth in Kirtsaeng, as well as the specific five factors prescribed by the Ninth Circuit prior to Kirtsaeng: (1) degree of success obtained on the claim, (2) frivolousness, (3) motivation, (4) objective reasonableness of factual and legal arguments, and (5) the need for compensation and deterrence.  On the one hand, the judge found that the first factor--degree of success--weighed in favor of granting defendants’ request for fees, and the fifth factor--need for compensation--lightly favored defendant.  On the other hand, he found that the second and fourth factors--frivolousness and objective reasonableness--both favored plaintiff given that plaintiff survived summary judgment and  established key elements of the copyright infringement claim, namely that plaintiff owned Taurus and that defendants had “access” to that work.  Judge Klausner also concluded that the third factor, motivation, also weighed in favor of plaintiff because plaintiff was a trustee that brought suit on behalf of Randy California’s estate in order to secure credit for him. The Ninth Circuit’s five factors standing alone arguably present a close call on fees given the trial judge’s conclusion that two weighed in favor of granting defendants’ request for fees, and three weighed against granting the request.  Following Kirtsaeng, however, Judge Klausner considered a sixth factor: litigation misconduct.  Defendants argued that plaintiff engaged in a litany of litigation misconduct, which supported defendants’ request for fees.  Judge Klausner agreed, reciting specific examples of what he described as plaintiff’s counsel’s “tenuous grasp of legal ethics and a rudimentary understanding of courtroom decorum,” and generally referencing “a litany of tasteless courtroom antics and litigation misconduct.”  This sixth factor, then, also weighed in favor of granting defendants’ request for fees. Notwithstanding that two of the original five Ninth Circuit factors, and a sixth “litigation misconduct” factor relevant under Kirtsaeng, all weighed in favor of fees, Judge Klausner declined to award fees to defendants.  Instead, he concluded that because the claim was objectively reasonable, and properly motivated, fees were not appropriate. Judge Klausner’s analysis is interesting in multiple respects.  He continued to apply the five Ninth Circuit factors in place prior to Kirtsaeng, but he also considered “litigation misconduct” as a sixth factor relevant under Kirtsaeng.  Where, as here, the factors were evenly split, Judge Klausner considered objective reasonableness and motivation as more compelling, and he relied on his prior decision to deny summary judgment to support his conclusion that plaintiff’s claim was objectively reasonable.  Moreover, despite the fact that litigation misconduct was considered as one of the factors, it is not clear how much weight, if any, was given to it.