Avvo Defeats False Advertising Lawsuit Alleging Pay-to-Play–Davis v. Avvo

The plaintiff alleges that Avvo provides editorial benefits to lawyers who advertise on Avvo, which causes the advertisers to get prospective clients who would have chosen the non-advertising lawyers. There are some parallels to the lawsuits against Yelp alleging pay-to-play, most of which went nowhere. This lawsuit also goes nowhere.

Avvo’s Ratings. Applying the narrow definition of commercial speech, the court says the ratings don’t constitute commercial speech because they don’t propose a transaction:

The website is an informational directory of attorneys, which consumers can consult whether or not they intend to hire an attorney. And the complained-of website features simply provide information; they might be considered in making, but do not themselves propose, a commercial transaction. Moreover, that sponsored advertisements appear on the defendant’s website does not morph the website’s noncommercial features into commercial speech.

Instead, citing the key Browne v. Avvo ruling from over a decade ago, the court says the ratings are Avvo’s constitutionally protected opinion:

The defendant’s rating system is inherently subjective. The defendant chooses the inputs for its system and decides how to weigh them. The outcome of this process is a number that the defendant presents as an evaluation of an attorney’s quality. A reasonable consumer would view an Avvo rating as just that – the defendant’s evaluation. What factors the defendant believes to be important in assessing attorneys, and the result of the defendant’s weighing of those factors, cannot be proven false.

I like this result, even though it’s an oversimplification in at least two ways. First, the algorithm might misprocess its input data. Second, the algorithm may contain factors (or be subject to human intervention) that is inconsistent with the public disclosures about the algorithm’s workings. Saying that algorithmically produced numerical ratings can’t be “false” is itself a legal fiction.

“Pro” Verification. Avvo displays a “pro” badge for lawyers who pay to verify their information. The plaintiff alleges that consumers misunderstand the badge to communicate superiority. The court says the “pro” badge is puffery:

Taken in this context, “Pro” constitutes a broad commendation relaying a view of an attorney’s level of experience or skill that can only be subjective. The plaintiff cannot prove that the attorneys marked “Pro” are decidedly undeserving of the status, because in context the term has no definite meaning or defining factors….

Moreover, the plaintiff’s allegation that the defendant misleadingly touts attorneys who pay for its services as “highly qualified,” “the right,” or the “best” attorneys fails for the same reasons. Stating that attorneys embody these qualities, especially in the context of the defendant’s advertisements, can be seen only as subjective, commendatory statements of the defendant; in other words, mere puffery.

Removing Negative Reviews. The plaintiff claimed that Avvo favored positive reviews and disfavored/removed negative reviews for paying advertisers. The court says that Avvo discloses that it screens out reviews that don’t meet its Community Guidelines). Further, “a collection of client reviews reflects subjective judgments,” i.e., constitutionally protected opinions.

Lack of Injury. Even if Avvo pages appear prominently in Google search results, the plaintiff wasn’t able to show that consumers actually diverted from it:

The plaintiff does not offer any facts showing that consumers rely on the allegedly misleading Avvo ratings, pro badges, client reviews, or statements by the defendant in choosing or gauging the reputation of an attorney. Nor does the plaintiff offer facts connecting these attributes of the defendant’s website to reputational harm or lost business. Moreover, the plaintiff does not offer any basis for, or any evidence corroborating, his belief that he and others similarly situated have suffered any – much less “many millions of dollars” of – injury due to the defendant’s alleged misrepresentations. The only fact the plaintiff pleaded to support his theory of harm is that the defendant’s website holds a prominent presence on the internet, and thus consumers who perform a Google search with phrases like “top litigation attorney” will see the website on the first page of results. The plaintiff has asserted no facts to support a conclusion that any potential clients are likely to be dissuaded from hiring him because of anything that has appeared on the defendant’s website. Alleging that the defendant’s website has high visibility on the internet does not change the plaintiff’s mere subjective belief of harm into something more.

Case Citation: Davis v. Avvo, Inc., 2018 WL 6629269 (SDNY Dec. 19, 2018)

Prior Blog Posts on Avvo:

Avvo’s Attorney Profile Pages Don’t Violate Publicity Rights–Vrdolyak v. Avvo

Lawsuit Against Avvo for Lawyer’s Profile Dismissed as SLAPP–Davis v. Avvo

Avvo Wins Big in Ratings Lawsuit–Browne v. Avvo

Lawyer Rating Service Sued–Browne v. Avvo

The post Avvo Defeats False Advertising Lawsuit Alleging Pay-to-Play–Davis v. Avvo appeared first on Technology & Marketing Law Blog.

The Ongoing Saga of the Florida Bar’s Angst About Competitive Keyword Advertising

In August, I reported on the Florida Bar’s continued angst about regulating competitive keyword advertising by lawyers. Read my post, “The Florida Bar and Competitive Keyword Advertising: A Tragicomedy (in 3 Parts),” for the full background. The short story is that in 2013, the Florida Bar considered banning lawyers’ competitive keyword advertising, but surprisingly concluded the process by blessing it. In 2018, the Florida Bar revisited banning competitive keyword advertising–despite five additional years of legal and empirical developments demonstrating the complete lack of justification–only to vote it down a second time. Then, like an immortal zombie, the issue resurrected for a third time. I made two submissions this year to the Florida Bar, in July and November, advocating against a ban.

The Florida Bar’s process is steaming towards a conclusion that ironically appears, once again, to bless competitive keyword advertising by lawyers–with a twist that the advertising lawyer would need to put his/her name in the first line of the search ad (and not place the rival’s name in the ad copy, which almost never happens).

The current proposed addition to Rule 4-7.13, the rule on misleading and deceptive advertising, would ban:

a statement or implication that another lawyer or law firm is part of, is associated with, or affiliated with the advertising law firm when that is not the case, including contact or other information presented in a way that misleads a person searching for a particular lawyer or law firm, or for information regarding a particular lawyer or law firm, to unknowingly contact a different lawyer or law firm.

A new comment would add (emphasis add):

Implication of Association or Affiliation with Another Lawyer or Law Firm
This rule prohibits any statement or implication that a lawyer or law firm is affiliated or associated with the advertising lawyer or law firm when that is not the case. Lawyers may not state or imply another lawyer is part of the advertising firm if the statement or implication is untrue. For example, when a lawyer leaves a law firm, the firm must remove the lawyer’s name from the firm’s letterhead, website, advertisements, and other communications about the law firm. An example of impermissible advertising would be including the name of a lawyer or law firm that is not part of the advertising law firm in an Internet advertisement or sponsored link that is displayed when the non-affiliated lawyer or law firm’s name is used as a search term when the advertisement does not clearly indicate that the non-affiliated lawyer or law firm is not part of the advertising law firm. Another example of impermissible conduct is use of another lawyer or law firm name as an Internet search term that triggers the display of an advertisement that does not clearly indicate that the advertisement is for a lawyer or law firm that is not the lawyer or law firm used as the search term. The triggered advertisement would not be misleading if the first text displayed is the name of the advertising lawyer or law firm and, if the displayed law firm name is a trade name that does not contain the name of a current or deceased partner, the name of the lawyer responsible for the advertisement is also displayed as the first text.

The comment bans competitive keyword advertising unless the ad clearly indicates the advertiser’s name; with a safe harbor if the advertiser’s name is listed as “the first text.” The term “first text” is ambiguous, and it appears that two different items might need to be the “first text,” a logical impossibility. I assume “first text” refers to the first line in the typical 3 line search advertising format.

On the one hand, a modest mandatory labeling requirement is not as terrible as an outright ban on competitive keyword advertising. Indeed, many attorney advertising rules require ad copy to contain the name of a responsible attorney, though how this applies to a highly space-constrained ad format like keyword ads has not always been clear. Furthermore, in theory, consumers could benefit if the labeling does, in fact, eliminate any possibility of confusion about the advertiser’s identity.

On the other hand, this rule is pointless at best and possibly pernicious at worst. The Florida Bar has no evidence that consumers are currently suffering any detriment from the status quo; nor do they have nay evidence that mandating the disclosure in the “first text” will resolve any such confusion (if it even exists). Furthermore, given the space constraints of search ads, dictating what must appear in the first text reduces the amount of space for other information, which could make it even more challenging for the ads to impart valuable information to consumers. This could undermine economic returns from search ads, making them a less valuable tool in the attorneys’ advertising toolkits, and therefore depriving consumers of the valuable information that search ads could provide.

For more on why I think the proposed move is unnecessary, see my article, Regulation of Lawyers’ Use of Competitive Keyword Advertising.

According to the Florida Bar’s ethics counsel, the proposal “will be on the Board of Governors agenda for first reading at the February Board of Governors meeting.” We’ll see if this “compromise” resolution passes in its current form. Given the unnecessary drama on this topic over the past half-decade, it seems like anything could still happen.

More Posts About Keyword Advertising

Your Periodic Reminder That Keyword Ad Lawsuits Are Stupid–Passport Health v. Avance
Restricting Competitive Keyword Ads Is Anti-Competitive–FTC v. 1-800 Contacts
Another Failed Trademark Suit Over Competitive Keyword Advertising–JIVE v. Wine Racks America
Negative Keywords Help Defeat Preliminary Injunction–DealDash v. ContextLogic
The Florida Bar and Competitive Keyword Advertising: A Tragicomedy (in 3 Parts)
Another Court Says Competitive Keyword Advertising Doesn’t Cause Confusion
Competitive Keyword Advertising Doesn’t Show Bad Intent–ONEpul v. BagSpot
Brief Roundup of Three Keyword Advertising Lawsuit Developments
Interesting Tidbits From FTC’s Antitrust Win Against 1-800 Contacts’ Keyword Ad Restrictions
1-800 Contacts Charges Higher Prices Than Its Online Competitors, But They Are OK With That–FTC v. 1-800 Contacts
FTC Explains Why It Thinks 1-800 Contacts’ Keyword Ad Settlements Were Anti-Competitive–FTC v. 1-800 Contacts
Amazon Defeats Lawsuit Over Its Keyword Ad Purchases–Lasoff v. Amazon
More Evidence Why Keyword Advertising Litigation Is Waning
Court Dumps Crappy Trademark & Keyword Ad Case–ONEPul v. BagSpot
AdWords Buys Using Geographic Terms Support Personal Jurisdiction–Rilley v. MoneyMutual
FTC Sues 1-800 Contacts For Restricting Competitive Keyword Advertising
Competitive Keyword Advertising Lawsuit Will Go To A Jury–Edible Arrangements v. Provide Commerce
Texas Ethics Opinion Approves Competitive Keyword Ads By Lawyers
Court Beats Down Another Competitive Keyword Advertising Lawsuit–Beast Sports v. BPI
Another Murky Opinion on Lawyers Buying Keyword Ads on Other Lawyers’ Names–In re Naert
Keyword Ad Lawsuit Isn’t Covered By California’s Anti-SLAPP Law
Confusion From Competitive Keyword Advertising? Fuhgeddaboudit
Competitive Keyword Advertising Permitted As Nominative Use–ElitePay Global v. CardPaymentOptions
Google And Yahoo Defeat Last Remaining Lawsuit Over Competitive Keyword Advertising
Mixed Ruling in Competitive Keyword Advertising Case–Goldline v. Regal
Another Competitive Keyword Advertising Lawsuit Fails–Infogroup v. DatabaseLLC
Damages from Competitive Keyword Advertising Are “Vanishingly Small”
More Defendants Win Keyword Advertising Lawsuits
Another Keyword Advertising Lawsuit Fails Badly
Duplicitous Competitive Keyword Advertising Lawsuits–Fareportal v. LBF (& Vice-Versa)
Trademark Owners Just Can’t Win Keyword Advertising Cases–EarthCam v. OxBlue
Want To Know Amazon’s Confidential Settlement Terms For A Keyword Advertising Lawsuit? Merry Christmas!
Florida Allows Competitive Keyword Advertising By Lawyers
Another Keyword Advertising Lawsuit Unceremoniously Dismissed–Infostream v. Avid
Another Keyword Advertising Lawsuit Fails–Allied Interstate v. Kimmel & Silverman
More Evidence That Competitive Keyword Advertising Benefits Trademark Owners
Suing Over Keyword Advertising Is A Bad Business Decision For Trademark Owners
Florida Proposes to Ban Competitive Keyword Advertising by Lawyers
More Confirmation That Google Has Won the AdWords Trademark Battles Worldwide
Google’s Search Suggestions Don’t Violate Wisconsin Publicity Rights Law
Amazon’s Merchandising of Its Search Results Doesn’t Violate Trademark Law
Buying Keyword Ads on People’s Names Doesn’t Violate Their Publicity Rights
With Its Australian Court Victory, Google Moves Closer to Legitimizing Keyword Advertising Globally
Yet Another Ruling That Competitive Keyword Ad Lawsuits Are Stupid–Louisiana Pacific v. James Hardie
Another Google AdWords Advertiser Defeats Trademark Infringement Lawsuit
With Rosetta Stone Settlement, Google Gets Closer to Legitimizing Billions of AdWords Revenue
Google Defeats Trademark Challenge to Its AdWords Service
Newly Released Consumer Survey Indicates that Legal Concerns About Competitive Keyword Advertising Are Overblown

The post The Ongoing Saga of the Florida Bar’s Angst About Competitive Keyword Advertising appeared first on Technology & Marketing Law Blog.

Consumers Don’t Confuse Almond Milk and Cow Milk–Painter v. Blue Diamond

A putative class claimed Blue Diamond “mislabeled its almond beverages as ‘almond milk’ when they should be labeled ‘imitation milk’ because they substitute for and resemble dairy milk but are nutritionally inferior to it.” The lawsuit fails. The court responded that the FDA has exclusive control over food labeling. The court also rejected the parallel false advertising claims. The court says:

Painter’s complaint does not plausibly allege that a reasonable consumer would be deceived into believing that Blue Diamond’s almond milk products are nutritionally equivalent to dairy milk based on their package labels and advertising….

Almond milk is not an “imitation” of dairy milk within the meaning of 21 U.S.C. § 343(c) and 21 C.F.R. § 101.3(e). Notwithstanding any resemblance to dairy milk, almond milk is not a “substitute” for dairy milk as contemplated by section 101.3(e)(1) because almond milk does not involve literally substituting inferior ingredients for those in dairy milk….

In addition, a reasonable jury could not conclude that almond milk is “nutritionally inferior” to dairy milk within the meaning of 21 C.F.R. § 101.3(e)(4), as two distinct food products necessarily have different nutritional profiles. As the district court concluded, it is not plausible that a reasonable consumer would “assume that two distinct products have the same nutritional content.”

Though this involves some legal arcanity, the results are pretty intuitive for anyone who regularly consumes almond milk.

This ruling squarely addresses the subject of a pending FDA notice-and-comment, which threatens to categorically ban the use of “milk,” “cheese,” and “yogurt” for vegan items. See “Use of the Names of Dairy Foods in the Labeling of Plant-Based Products” (FDA-2018-N-3522). Like so many other initiatives of our current administration, this rule-making is not intended or designed to benefit consumers at all. Instead, it’s transparently designed to aid dairy producers from further revenue declines by creating consumer FUD about plant-based alternatives. In response to the FDA’s notice-and-comment, Kim Boyle and I submitted some brief comments in favor of allowing plant-based alternatives to use the term “milk.”

While the Ninth Circuit’s ruling is hardly definitive, it’s a good sign that current law lets plant-based milks use the term without being subject to frivolous class-action lawsuits that do nothing to improve consumer welfare. I hope the FDA reaches the same conclusion.

Case citation: Painter v. Blue Diamond Growers, No. 17-55901 (9th Cir. Dec. 20, 2018)

The post Consumers Don’t Confuse Almond Milk and Cow Milk–Painter v. Blue Diamond appeared first on Technology & Marketing Law Blog.

Your Periodic Reminder That Keyword Ad Lawsuits Are Stupid–Passport Health v. Avance

The parties compete for the provision of health services related to traveling, like immunizations. The defendant Avance bought keyword ads triggered on the plaintiff’s trademark “Passport Health.” In 2013, the trademark owner complained, and Avance apparently dropped the Google ad buy. However, apparently everyone forget about Bing. In 2017, the trademark owner reemerged, complaining about the Bing ad buys. This lawsuit ensued.

It doesn’t go well for the trademark owner. You kind of get the sense where the judge is going from this introductory summary: “During the three-year period leading up to this lawsuit, Avance’s Bing Passport Health AdWord resulted in forty-one clicks, seven of which occurred in the month this suit was filed. It is undisputed that there is no evidence that a consumer was actually confused by the Avance’s Bing advertisement.” How in the world did this case reach summary judgment rather than settling early? Worse, three Biglaw firms (Womble, Michael Best, and Troutman Sanders), including 6 lawyers in 5 different offices, were involved in this litigation. What an expensive waste.

This screenshot shows Avance’s ad buy. See the first ad on the right. As you can see, the trademark “Passport Health” is in the first line.

The court says competitive keyword advertising is not per se infringing. Consistent with the uncited FTC v. 1-800 Contacts ruling, the court says “Passport has failed to identify any decision which has held that the mere purchase of an AdWord from a search engine constitutes trademark infringement.” (Cites to the 2007 JG Wentworth and 2004 Geico rulings). This case doesn’t disturb that uniform and unbroken line of jurisprudence.

The court then considered Avance’s inclusion of the trademark “Passport Health” in the ad copy. The trademark owner made the mockable argument “that it is entitled to judgment as a matter of law because Avance used its identical mark in the Bing advertisement, and therefore there is a presumption of a likelihood of confusion.” Wow, that’s pretty hostile to the venerable and universally accepted multi-factor test for likelihood of consumer confusion. The trademark owner also made the mockable argument that “because the phrase ‘passport health’ appears in Avance’s Bing advertisement, trademark infringement has been conclusively established.”

These positions likely explain why a case over 41 clicks didn’t settle. The trademark owner apparently took intransigent legal positions that far exceed trademark law. Not much room for settlement when the trademark owner grossly overestimates its chance of winning.

Despite the trademark owner’s optimism, the court easily concluded there’s no likelihood of consumer confusion. Citing the Network Automation ruling, the court says “A search engine’s segregation of the search results on the page so that advertisements appear in separately labeled sections, in smaller or different font, or with shading lessens the likelihood that consumers will be confused.” I guess Bing’s implementation passed muster, even though the screenshot above shows no shading or lines to demarcate the ads. The court concludes:

Avance has proffered evidence that the Bing advertisement was clicked 1.4 times per month for the three years which preceded this case, and that only .012% of visits to Avance Care’s website during a twenty-six month period came from the Bing advertisement. See George & Co., 575 F.3d at 398 (4th Cir. 2009) (“[e]vidence of only a small number of instances of actual confusion may be dismissed as de minimis.”). It is undisputed that Bing’s share of the search engine market is minimal as compared to Google’s, and there is simply no evidence that any consumers clicked on the Avance Care ad and were confused.

If a competitive keyword ad falls in Bing’s forest and no one is around to hear it, is it trademark infringement?

As a bonus insult, the court denigrates the strength of the “Passport Health” trademark, saying it’s a “conceptually weak” mark. Yes, the trademark owner paid substantial money fighting 41 clicks, only to walk out of court with its key trademark asset besmirched.

Two obvious Qs:

  • given the ease of this win and Passport Health’s mountain-out-of-molehill position, I wonder if the court will award Avance its attorneys’ fees under the Lanham Act fee-shifting provision for “exceptional” cases?
  • why wasn’t it satisfactory for the trademark owner to avail itself of Bing’s IP policy, which (like Google) lets trademark owners block references to the trademark in the ad copy? That seems like it would have solved much of the trademark owner’s issue.

You already knew this, but let me remind you: if you’re suing over competitive keyword ads….

Case citation: Passport Health, LCC v. Avance Health System, Inc., 2018 WL 6620914 (E.D.N.C. Dec. 18, 2018)

More Posts About Keyword Advertising

Restricting Competitive Keyword Ads Is Anti-Competitive–FTC v. 1-800 Contacts
Another Failed Trademark Suit Over Competitive Keyword Advertising–JIVE v. Wine Racks America
Negative Keywords Help Defeat Preliminary Injunction–DealDash v. ContextLogic
The Florida Bar and Competitive Keyword Advertising: A Tragicomedy (in 3 Parts)
Another Court Says Competitive Keyword Advertising Doesn’t Cause Confusion
Competitive Keyword Advertising Doesn’t Show Bad Intent–ONEpul v. BagSpot
Brief Roundup of Three Keyword Advertising Lawsuit Developments
Interesting Tidbits From FTC’s Antitrust Win Against 1-800 Contacts’ Keyword Ad Restrictions
1-800 Contacts Charges Higher Prices Than Its Online Competitors, But They Are OK With That–FTC v. 1-800 Contacts
FTC Explains Why It Thinks 1-800 Contacts’ Keyword Ad Settlements Were Anti-Competitive–FTC v. 1-800 Contacts
Amazon Defeats Lawsuit Over Its Keyword Ad Purchases–Lasoff v. Amazon
More Evidence Why Keyword Advertising Litigation Is Waning
Court Dumps Crappy Trademark & Keyword Ad Case–ONEPul v. BagSpot
AdWords Buys Using Geographic Terms Support Personal Jurisdiction–Rilley v. MoneyMutual
FTC Sues 1-800 Contacts For Restricting Competitive Keyword Advertising
Competitive Keyword Advertising Lawsuit Will Go To A Jury–Edible Arrangements v. Provide Commerce
Texas Ethics Opinion Approves Competitive Keyword Ads By Lawyers
Court Beats Down Another Competitive Keyword Advertising Lawsuit–Beast Sports v. BPI
Another Murky Opinion on Lawyers Buying Keyword Ads on Other Lawyers’ Names–In re Naert
Keyword Ad Lawsuit Isn’t Covered By California’s Anti-SLAPP Law
Confusion From Competitive Keyword Advertising? Fuhgeddaboudit
Competitive Keyword Advertising Permitted As Nominative Use–ElitePay Global v. CardPaymentOptions
Google And Yahoo Defeat Last Remaining Lawsuit Over Competitive Keyword Advertising
Mixed Ruling in Competitive Keyword Advertising Case–Goldline v. Regal
Another Competitive Keyword Advertising Lawsuit Fails–Infogroup v. DatabaseLLC
Damages from Competitive Keyword Advertising Are “Vanishingly Small”
More Defendants Win Keyword Advertising Lawsuits
Another Keyword Advertising Lawsuit Fails Badly
Duplicitous Competitive Keyword Advertising Lawsuits–Fareportal v. LBF (& Vice-Versa)
Trademark Owners Just Can’t Win Keyword Advertising Cases–EarthCam v. OxBlue
Want To Know Amazon’s Confidential Settlement Terms For A Keyword Advertising Lawsuit? Merry Christmas!
Florida Allows Competitive Keyword Advertising By Lawyers
Another Keyword Advertising Lawsuit Unceremoniously Dismissed–Infostream v. Avid
Another Keyword Advertising Lawsuit Fails–Allied Interstate v. Kimmel & Silverman
More Evidence That Competitive Keyword Advertising Benefits Trademark Owners
Suing Over Keyword Advertising Is A Bad Business Decision For Trademark Owners
Florida Proposes to Ban Competitive Keyword Advertising by Lawyers
More Confirmation That Google Has Won the AdWords Trademark Battles Worldwide
Google’s Search Suggestions Don’t Violate Wisconsin Publicity Rights Law
Amazon’s Merchandising of Its Search Results Doesn’t Violate Trademark Law
Buying Keyword Ads on People’s Names Doesn’t Violate Their Publicity Rights
With Its Australian Court Victory, Google Moves Closer to Legitimizing Keyword Advertising Globally
Yet Another Ruling That Competitive Keyword Ad Lawsuits Are Stupid–Louisiana Pacific v. James Hardie
Another Google AdWords Advertiser Defeats Trademark Infringement Lawsuit
With Rosetta Stone Settlement, Google Gets Closer to Legitimizing Billions of AdWords Revenue
Google Defeats Trademark Challenge to Its AdWords Service
Newly Released Consumer Survey Indicates that Legal Concerns About Competitive Keyword Advertising Are Overblown

The post Your Periodic Reminder That Keyword Ad Lawsuits Are Stupid–Passport Health v. Avance appeared first on Technology & Marketing Law Blog.

Screenshotting a Newspaper Page May Infringe a Licensed Photo–Hirsch v. Complex

This is a copyright infringement lawsuit. Hirsch, a professional photographer, took a photo of Santino Boderick, who was an associate of a well-known hiphop artist, Bobby Shmurda. Hirsch licensed the photograph to the New York Post, where it appeared in “Page Six”. Complex, the defendant, reported on the same story and published a video that included a screenshot of Page Six. The video is 1:44 minutes long; the screenshot of the photo lasted for at least four seconds. (The photo was blurred for two seconds and the video focused on the headline.) Hirsch sued Complex for copyright infringement. Complex defended that its use was de minimis and not actionable, that it qualified for fair use, and that it was authorized by the license Hirsch granted to Page Six.

The court says it cannot say as a matter of law that Complex’s use was de minimis. The court looks to a Second Circuit case involving footage of a poster on a television show where the court denied summary judgment. The court also considered guidance from the Librarian of Congress saying that use of visual works by public broadcasting entities (either in the background or featured) required payment of royalties. Courts have held that use as short as three seconds is not de minimis. Indeed, the Southern District of New York denied a motion to dismiss claims brought by the same plaintiff against HBO. In that case, the photo was visible for only two seconds.

The court also says it’s unable to find fair use as a matter of law. The court says the use is not transformative despite being in another medium. The court says that the nature of the work (photos taken for news-gathering purposes) favors fair use. The third factor cuts against a finding of fair use. Finally the court says the “effect on the market” factor also favors the photographer.

Finally, the court also rejects Complex’s argument that the use of the work is authorized because the photographer has licensed the work to Page Six in a way that permits unrestricted copying or use by its online readers. Specifically, Complex points to the sharing functionality on Page Six’s site as reflecting permission to use the photo freely by the public. Complex cited to two terms of use cases as standing for the proposition that a cause of action cannot be maintained against a website that permits its users to copy material at will. The court finds these cases irrelevant and says Complex misunderstands the plaintiff’s burden. Once plaintiff satisfies plaintiff’s burden of proving ownership and copying, the burden shifts to the defendant on any affirmative defenses (such as authorization). The court says Complex failed to carry its burden and there are factual disputes anyway.

__

The de minimis argument is interesting and one that’s increasingly being litigated. The court has a pretty strict standard for dismissal.

We’ve seen a lot of momentum in the direction of finding fair use at the motion to dismiss stage, but as this case illustrates, the pendulum hasn’t even swing to the middle. For another case involving memes where the court declined to find fair use at the motion to dismiss stage, see this post from last week: “Fair Use for “Meme” Can’t Be Decided on Motion to Dismiss—Philpot v. Alternet Media

Finally, the last argument is reminiscent of a copyright defense in a case that has received a lot of attention on this blog: AFP v. Morel. The court could have probably rejected the argument by simply citing to Morel (which does not warrant a mention for some reason).

___

Eric’s Comments:  Any opinion that starts out with the following introduction will get my attention: “This case, which is factually very straightforward but presents a whole host of legal issues, would — in the parlance of law school — make for a good issue-spotter examination.” 👀👀👀

Once again, photos create unexpected legal problems for folks. The court says “For the first two seconds, the Photograph is clear as day, and its prominence unmistakable — it is the thing being featured in the video and takes up most of the screen.” News videos routinely show screenshots of third party newspaper coverage of the same topic. Usually the screenshot highlights the headline, though sometimes it highlights a pull quote. It’s unclear if screenshotting newspapers is categorically problematic. However, this opinion suggests that any collateral copyrighted material in the screenshot–such as a photo the newspaper licensed from a third party–is liability bait, no matter how briefly it’s shown. Fortunately, there is an obvious but suboptimal solution. Video producers taking screenshots of third party newspapers need to blur EVERYTHING–ESPECIALLY PHOTOS–other than the minimum they need to establish their point.

I agree with Venkat that it’s borderline-mockable to see defendants argue that they can freely recycle photos simply because they were posted to social media. The argument would create such a giant loophole that I don’t think courts will accept it.

Case citation: Hirsch v. Complex Media, 2018 US Dist. LEXIS 209701 (S.D.N.Y. Dec. 10, 2018)

Related posts:

Appropriation Artist Can’t Win Fair Use Defense on Motion to Dismiss–Graham v. Prince

AFP & Getty’s Republication of Twitter/Twitpic-Sourced Photos Turns Out to Be Costly – AFP v. Morel

AFP v. Morel – Lawsuit Over Haiti Photos Taken From Twitter/Twitpic Goes to Trial

Court Definitively Rejects AFP’s Argument That Posting a Photo to Twitter Grants AFP a License to Freely Use It — AFP v. Morel

Court Rejects Agence France-Presse’s Attempt to Claim License to Haiti Earthquake Photos Through Twitter/Twitpic Terms of Service — AFP v. Morel

Agence France-Presse Claims Twitter’s Terms of Use Authorize Its Use of Photographs Posted to TwitPic — Agence France-Presse v. Morel

The post Screenshotting a Newspaper Page May Infringe a Licensed Photo–Hirsch v. Complex appeared first on Technology & Marketing Law Blog.

Two Pro Se Section 230 Rulings–Scott v. Carlson & Watkins v. Carr

While we wait for the next big Section 230 ruling (so many cases are on appeal!), today I’m recapping two recent pro se cases.

Scott v. Carlson. The complaint alleges that: Carlson created online content to attack Scott; Moon published Carlson-submitted false information about Scott to a message board Moon operates called Kiwi Farms (self-described as being “about eccentric individuals and communities on the Internet. These people are commonly referred to as Lolcows and are each distinct thanks to their erratic public behavior”); and DiGrippo published Carlson-submitted false information about Scott to the Encyclopedia Dramatica wiki operated by DiGrippo. In a footnote, the court observes that “This is Scott’s eighth pro se case filed in this court within the last two years. All of them have been dismissed.”

The lawsuit also fails. In particular, the defamation claims against Moon and DiGrippo fail due to Section 230. The court tersely says that they “are not liable for enabling the unlawful content of others to be posted online.”

Case citation: Scott v. Carlson, 2018 WL 6537145 (W.D. Va. Dec. 12, 2018)

Watkins v. Carr. Oh great–yet another Trump-related lawsuit. #MALGA. This one involves the JQPUBLIC blog, which covers Air Force-related items. The blog post “After Trump Event, New Questions About Air Force Vet’s Backstory” explored some apparent inconsistencies in the background of Watkins, who asked a question at a Trump media event and got a job offer from Trump on the spot. If Watkins did in fact play fast-and-loose with the truth about her background (something I have no opinion about), maybe she’d be a perfect candidate to work for Trump after all.

Watkins didn’t like the blog post and sued the blogger and the blog operator for $30M. The defendants sought summary judgment per Section 230. The court punts:

Although Defendants seek CDA immunity, the record evidence viewed most favorably to Watkins does not demonstrate what role, if any, Defendants played in creating or developing the content of the post. Defendants did not, for example, submit affidavits or other documentary evidence to establish that it did not contribute or otherwise participate in the creation of the blogpost content. Nor can the Court consider as evidence Defendants’ mere averments included within their pleadings. Accordingly, the Court declines to reach whether Defendants are immune from suit under the CDA.

The court treats the defendants as having the burden of establishing the 230 defense, consistent with its general characterization as an affirmative defense. However, the court could have expected Watkins to produce record evidence establishing her prima facie case against the defendants, including their role in the publication that would have clarified the applicability of Section 230. Surely the court was being gentle because of her pro se status. No matter, because Watkins’ defamation claim failed for other reasons. The court says “Watkins identifies as defamatory 26 separate passages of the blogpost. However, Watkins has not generated any evidence to prove any of this content is false or conveys a ‘provably false factual connotation.’” The false light claim fails for the same reason. As for IIED, the court says “Defendants’ publishing a blogpost alone is not the kind of ‘extreme and outrageous’ conduct contemplated by this rarely invoked common law tort.”

So overall, I’ll rule this as a net win for bloggers. The result would have been even better with a robust anti-SLAPP law leading to a quicker pre-discovery dismissal with fee shifts.

Case citation: Watkins v. Carr, 2018 WL 6570686 (D. Md. Dec. 13, 2018)

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If Your Trademark Case Depends on Showing Initial Interest Confusion, Save Your Money–Select Comfort v. John Baxter

I’ve bashed the initial interest confusion doctrine for decades. It’s one of the worst doctrinal “innovations” in trademark law–ever. However, you might have noticed that I haven’t blogged many initial interest confusion cases recently. Why? Because the phrase rarely shows up in court opinions any more. (I have an email alert in Westlaw for the phrase, so I see all the cases). I think this paucity is due to the fact the doctrine almost never wins in court, and trademark owners are getting the message that they should stop relying on it. I still need to write the definitive article declaring the doctrine dead, but it really is. Good riddance.

Today’s case comes on post-jury motions in one of several litigation battle royales in the mattress industry. (Aside: I HATE blogging mattress cases because players in that industry litigate to the death, resulting in overlong opinions). The jury found that “Defendants did not infringe Select Comfort’s trademark rights in SLEEP NUMBER, WHAT’S YOUR SLEEP NUMBER?, SELECT COMFORT, or COMFORTAIRE.” Select Comfort sought to overturn the jury verdict based on the initial interest confusion doctrine. The court says no (emphasis added):

Select Comfort first argues that the Court erred by not allowing it to pursue an initial interest claim. Select Comfort argues that it should have been allowed to pursue the theory that significant confusion at the initial point that consumers viewed on-line advertisements is all that was required to establish liability under the Lanham Act, and that it was error to instruct the jury that a showing of a likelihood of confusion at the time of purchase was required. Defendants argue that the Court’s rulings on the initial interest doctrine were correct.
In its order granting in part and denying in part the parties’ motions for summary judgment, the Court held that Select Comfort’s trademark infringement claim requires a showing of a likelihood of confusion at the time of purchase. In so holding, the Court explained that in Sensient Techs. Corp. v. SensoryEffects Flavor Co., 613 F.3d 754, 766 (8th Cir. 2010), the Eighth Circuit declined to formally adopt the “initial interest confusion” doctrine and explained that “even if the doctrine applied generally in this circuit, it would not apply” where, “although the products are similar, … the customers are sophisticated and exercise a relatively high degree of care in making their purchasing decisions.” Id. As explained previously, the initial interest doctrine would not apply to the facts of this case because the beds at issue were purchased on-line and are expensive, suggesting that consumers would exercise a high degree of care in making any such purchase. The Court discerns no error in its ruling on initial interest confusion. Importantly, the Court notes that it did not hold that initial interest confusion was irrelevant to the issue of whether there was a likelihood of confusion (or that the jury could not consider evidence of such confusion), but only that such confusion alone would not result in liability. Moreover, Select Comfort’s theory of liability in this case centers on the contention that Defendants capitalize on consumers being confused initially at the point-of-click on-line, thus diverting the consumers to Defendants’ website and then fostering that confusion and/or replacing it with false claims. Select Comfort was free to submit evidence of point-of-click confusion to support a showing of likelihood of confusion between the purchasing alternatives at the time of purchase.

This is a sensible result. I’m OK when a trademark owner shows that competitive ads contributed to an overall likelihood of confusion. Select Comfort should do that. Apparently it could not. Otherwise, a free tip to trademark owners: if your entire infringement case is based solely on establishing initial interest confusion, you’re better off putting your money into your mattress.

Case citation: Select Comfort Corp. v. John Baxter, 2018 WL 6529493 (D. Minn. Dec. 12, 2018)

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Another Section 512(f) Case Fails–ISE v. Longarzo

This ruling doesn’t break a lot of new doctrinal ground. Another 512(f) case fails–nothing new. I’m blogging mostly for completeness and as a follow up to my May post remarking that a 512(f) case survived a motion to dismiss. At the time, I said, “If you’re a 512(f) enthusiast, you know better than to get too excited about this ruling. The math still strongly indicates ISE will lose on 512(f).” On summary judgment, the case reached its expected denouement.

I previously summarized the case:

the litigants dispute ownership over a TV show, “The Weekend in Vegas.” ISE posted the video to Amazon. A defendant asked Amazon to remove it, which Amazon did. Among other claims, ISE sued the defendants for violating 512(f), saying the requests to Amazon were improper takedown demands.

This opinion provides some details about the so-called takedown notices. The first notice read “Use of my name and/or image/likeness is an infringement of my right of privacy and right of publicity, as these rights have not been granted by me.” The opinion just says it was “submitted to Amazon.” The second notice was emailed to an Amazon employee and said “[Mr. Civillico’s] image, likeness and performance are being improperly used by a producer, Gary Harmon, who has no assets but intentionally breached an agreement, failed to pay contractually owed amounts, even took money from [Mr. Civillico] to pay for certain expenses with a promised quick reimbursement . . . and is brazenly using these episodes to try to profit on my client’s work.”

The 512(f) claim fails for three reasons. First, the defendants’ takedown notices weren’t based on copyright: “By requesting that Amazon removes the Series based upon infringement of Mr. Civillico’s rights of publicity and privacy, Mr. Longarzo has not sent a DMCA takedown notice.” Second, the takedown notice wasn’t sent to Amazon’s designated agents for notice of copyright infringement, and misdirected outreach to the wrong contacts cannot support a 512(f) claim. Third, the defendants easily defeat 512(f)’s scienter requirement simply by testifying otherwise (“Both Mr. Civillico and Mr. Longarzo have submitted sworn testimony indicating that they had subjective, good faith beliefs that they were not knowingly or intentionally misrepresenting any rights to Amazon.”)

While the outcome isn’t surprising, it’s hard to cheer this ruling. First, the court interprets 512(f)’s requirements quite strictly. Unless the defendant properly tenders a 512(c)(3) notice, 512(f) doesn’t apply even if the service removed the content. There might be other legal remedies for the non-copyright-based claims, but those are also doubtful. Second, while 512(f) cases routinely fail for lack of scienter, the court allowed the case to survive the motion to dismiss based on thin allegations, only to reject the scienter on summary judgment. I understand the value of letting cases mature to summary judgment, but here it seems like the allegations were thin enough that the court could have spared both parties the extra litigation costs.

Case citation: ISE Entertainment Corp. v. Longarzo, No. CV 17-9132-MWF (JCx) (C.D. Cal. Dec. 11, 2018)

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Fair Use for “Meme” Can’t Be Decided on Motion to Dismiss—Philpot v. Alternet Media (Guest Blog Post)

by guest blogger Stacey Lantagne

Memes implicate many legal issues, one of the major ones being copyright infringement and fair use.

The copyright dispute here revolves around a photograph of Willie Nelson taken by the plaintiff, Philpot, and posted to Wikimedia pursuant to a Creative Commons Attribution 2.0 Generic license. This license permits sharing and adaptation of the work, as long as proper attribution is provided.

The defendant, Alternet, took the photo and superimposed a quote over it: “Rednecks, hippies, misfits – we’re all the same. Gay or straight? So what? It doesn’t matter to me. We have to be concerned about other people, regardless. I don’t like seeing anybody treated unfairly. It sticks in my craw. I hold on to the values from my childhood.” The quote seems to come from a 2010 Parade interview with Nelson. After superimposing the quote, Alternet posted the photograph on Facebook with the caption, “We need more values like this.” Alternet did not credit Philpot for the photo, which was shared 33,000 times from Alternet’s Facebook page.

 

 

Philpot sued for copyright infringement and DMCA violations, and Alternet moved to dismiss. Its copyright infringement defense basically boiled down to meme = fair use. The court’s analysis, however, focuses on the number of factual questions needed to be resolved before a fair use decision could be rendered.

On the first factor regarding the purpose and character of the use, the court notes that it can’t decide purely on the complaint whether Alternet’s use was transformative. Alternet asserts that it was using the photograph for political commentary, which is different than the photograph’s original purpose. However, the court finds that Philpot “credibly argues” that his purpose was to use the photograph to identify Willie Nelson, and that Alternet is likewise using the photograph merely to identify the source of the quote superimposed on top of it.

It’s hard to win a fair use defense when a court decides that it needs more facts to rule on transformativeness, and the rest of the analysis predictably can’t save Alternet’s motion. The court finds that the rest of the factors similarly require factual analyses inappropriate for the motion to dismiss stage. Alternet’s fourth factor effect-on-the-market argument, in particular, focused on outside evidence, such as Philpot’s testimony in previous copyright infringement cases, which the court finds it inappropriate to consider at this stage.

Alternet fares better with dismissal of Philpot’s DMCA claim. Philpot’s complaint alleged that Alternet should have known its removal of the metadata attached to the photograph would enable infringement of Philpot’s copyright, but the court finds this a conclusory allegation with no facts pled as to Alternet’s mental state. Because the relevant portion of the DMCA requires an “affirmative showing . . . that the defendant was aware or had reasonable grounds to be aware” of the consequences of its action, the court dismisses the DMCA claim with leave to amend.

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In my previous work on memes, I concluded that the word “meme” is used to describe so many disparate things that a one-size-fits-all fair use analysis seems untenable. Some memes are incredibly transformative of the source material, while other things that people call memes seem much less transformative to me. The version of a meme at issue in this case – a photograph with text superimposed over it – seems to me to be one of the middle cases. I could see different instances of this going either way on a transformative analysis, depending on what exactly the superimposed text is in relation to the underlying photograph.

What really strikes me about this case is that it’s actually all about attribution, a right that is enormously popular with creators but that’s not actually part of the exclusive statutory rights of U.S. copyright. I’ve been observing for a while this phenomenon when it comes to credit: It’s often immensely important to online creators, but it’s not really part of U.S. copyright law. Philpot’s license allowed Alternet to do virtually anything with the photo as long as it provided the proper credit. This entire lawsuit could have been averted so easily.

Case citation: Philpot v. Alternet Media, Inc., 2018 WL 6267876 (N.D. Cal. Nov. 30, 2018)

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Another Gambling Case Over Online Virtual Coins Proceeds–Wilson v. Playtika

I blogged about Big Fish, who had a trip to the Ninth Circuit and was denied a bid to arbitrate claims against it based on its waiver of the right to arbitrate. As a follow up, I also blogged about the Huuuge case, where the same judge denied a bid to arbitrate claims against a gaming company on the basis of lack of affirmative assent to the terms. Today’s case involves gambling claims against Playtika, an Israeli company with services that look similar to Huuuge. It’s in front of the same judge. The ruling deals with a range of issues, including personal jurisdiction and enforceability of the terms of service, all of which the defendant Playtika loses.

The personal jurisdiction analysis is somewhat interesting, notwithstanding that it deals with personal jurisdiction. The court talks about the distinction between contract and tort cases, and characterizes this as a hybrid. The court concludes that Playtika has availed itself of the privilege of doing business in the State of Washington. The games rely on repeated coin purchases, so Playtika contemplated “future consequences” with Washington residents. The court says the result is the same if it applies a tort-based analysis. Playtika has constructive knowledge because it is aware that Washington residents purchase virtual coins.

Playtika argued that users had to litigate in Israel because they agreed to that forum via the terms of service. Playtika’s terms of service implementation is similar to Huuuge’s implementation in that users weren’t required to check the box indicating assent to the terms. Playtika’s terms suffer the same fate as Huuuge’s: they’re treated as legally useless. As to Playtika’s forum non conveniens arguments, the court says that Washington has an interest in enforcing its gambling statute to protect Washington residents, and there’s no guarantee that the alternate forum would respect these rights.

Substantively, Playtika challenged whether the virtual chips that players win are “things of value” under the Washington anti-gambling statute. Playtika noted that the complaint here alleged players can receive chips for free. (In the Big Fish case the Ninth Circuit noted it wasn’t considering the effect of players receiving virtual coins for free since this was outside the four corners of the complaint.) However, the court says the complaint against Playtika only alleges the “initial allotment” is free. Playtika also cited screenshots attached to the complaint showing the availability of free chips, but the court says at most the screenshots show players can receive “some additional coins.” The availability of additional coins in an uncertain frequency or quantity does not establish that the virtual coins aren’t “things of value.” The court adds that if free chips only allow for a “short” period of playing time, then “filling in the intervening time could be very expensive.” So even some amount of free chips may not be enough to take the virtual coins outside the definition of a “thing of value”. Playtika also claimed that the terms specify its players are not required to make any purchases and Playtika’s publicly filed financial documents indicate that only a small percentage of the players actually purchase additional coins anyway. The court says neither fact is germane to whether the virtual coins are a thing of value. Finally, Playtika also asks the court to disregard the Ninth Circuit’s Kater ruling as contrary to the position of the Washington Gambling Commission. The court declines, saying that it makes sense to follow the Ninth Circuit’s guidance in Kater, which already declined to consider a pamphlet put out by the commission.

The court also rejects Playtika’s argument that plaintiffs cannot recover because they are seeking to recover the value of “the thing . . . lost” which is precluded by the statute. The court also says that the games do not fall into the statutory exemption for a “bona fide business transaction”.

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Is a settlement on the horizon as a result of the pronouncements of this court (and Kater)? As with the Ninth Circuit’s ruling in Kater, this ruling also rejects many of the game company’s arguments on the merits. The tenor of the court’s ruling is that the game mechanics fit squarely within the prohibitions of Washington’s gambling statute. The one ray of hope is a sentence from the ruling that if the virtual coins only serve to unlock higher levels of play, then they may fall outside the definition of “thing of value”.

The key unresolved question: how can an online game company can lawfully structure a game in a way to make money from selling virtual coins? Do the courts’ statements regarding the availability of free chips offer some glimmer of hope?

Citing to the position of the gambling commission is dicey. In Kater, Big Fish also sought the input of the gambling commission. The commission with one commissioner dissenting stated it took no official position, but nevertheless included a sentence in its ruling expressing overall concern with the effects of these types of games. (Here’s a link to the commission’s order re: Big Fish.)

I mentioned the Huuuge case (and its companion) above and in a prior post. Defendants in those cases have filed a notice of appeal. They will likely get a stay of the trial court proceedings since the rulings involved denial of a request to arbitrate.

Case citation: Wilson v. Playtika, 3:18-cv-05277-RBL (W.D. Wash. Nov. 20, 2018)

Related posts:

Defendant Can’t Send Virtual Gambling Claims to Arbitration

Gambling App Fails to Create Binding Terms of Service–Wilson v. Huuuge

Ninth Circuit Reinstates Virtual Platform Gambling Lawsuit Against Big Fish

Federal Court Rejects Online Gambling Lawsuit Against Valve–McLeod v. Valve

Big Fish’s Virtual Casino Doesn’t Violate Washington’s Gambling Statute

Virtual Casino Doesn’t Violate California’s Gambling Law–Mason v. Machine Zone (Guest Blog Post)

Appeals Court Affirms Rejection of Gambling Claims Against Machine Zone

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