In a victory for plaintiffs bringing Lanham Act claims to protect their trademarks, the Supreme Court held on April 23, 2020, that a plaintiff is not required to show that the defendant “willfully” infringed its trademark in order to recover the defendant’s ill-gotten profits under the Act. The ruling favors Lanham Act false advertising plaintiffs as well.

In Romag Fasteners, Inc. v. Fossil, Inc., 140 S. Ct. 1492 (2020), Romag and Fossil signed an agreement allowing Fossil to use Romag’s fasteners in Fossil’s handbags and other products. Romag later discovered that the production factories Fossil hired in China were using counterfeit Romag fasteners while Fossil did little to stop them. Romag alleged that Fossil infringed on Romag’s trademark rights and falsely represented that Fossil’s fasteners came from Romag. The jury agreed and found that Fossil had acted “in callous disregard” of Romag’s rights. However, the jury also found that Fossil did not act willfully. Relying on Second Circuit precedent requiring a plaintiff seeking profits to prove that the defendant’s infringement was willful, the district court ruled that Romag could not recover Fossil’s profits. After the Federal Circuit affirmed, the Supreme Court agreed to resolve the circuit split on this issue.Continue Reading Supreme Court’s Lanham Act Ruling Paves Easier Path to Profits for False Advertising Plaintiffs

DNA StrandEighty-eight percent of consumers are willing to pay more for healthier foods. Manufacturers have responded by focusing marketing campaigns on the health and safety benefits of their products, often at the expense of their competitors. But when Arla Foods portrayed a seven-year old girl defining a common hormone used to increase milk production in cows as “weird stuff” akin to a “six-eyed monster” with “razor sharp teeth” and electric fur, a Wisconsin federal judge decided the ad went too far and would likely mislead consumers. Despite Arla’s reliance on a small disclaimer and “scientific debate” over the health and safety of dairy products made from cows treated with rbST, the Court enjoined Arla’s campaign, finding it was likely to mislead consumers into thinking rbST was unsafe, unhealthy, weird, and “altogether something you should not feel good about feeding your family.”

On April 25, 2017 Arla launched a $30 million advertising campaign targeting “ingredient savvy” U.S. consumers seeking more information about the products they are eating and feeing their families. The centerpiece of the campaign is a 30-second commercial titled, “Arla Cheese Asked Kids: What is rbST?”Continue Reading Arla’s Dairy Campaign Goes Sour After Court Enjoins Ad Claims Attacking rbST

gavel-and-questionYou think judges are immune to lawsuits? Think again, especially if you are a retired judge seeking to resolve disputes in the private alternative dispute resolution (ADR) business.

A San Diego jury is being asked to decide whether former California Court of Appeal Justice Sheila Sonenshine and ADR powerhouse JAMS, Inc. are liable for false advertising based on representations touting Sonenshine’s experience on JAMS’s website.

Kevin Kinsella, the plaintiff in the case, hired JAMS and Sonenshine to serve as a privately compensated temporary judge in his divorce dispute. Kinsella is a venture capitalist who had a number of profitable business ventures prior to his marriage and claims that he agreed to his now ex-wife’s request to hire Sonenshine because he wanted a judge with expertise in dissolution actions and business matters. Kinsella says that he reviewed JAMS’s website to evaluate Sonenshine’s experience in business, including investment banking, financial markets, business ventures, and private equity funding, but learned too late that Sonenshine’s biography was misleading.Continue Reading Even Former Judges Can Be Exposed to False Advertising Liability

capsulesMany businesses acquire commercial liability insurance coverage to protect against “advertising injury” resulting from their marketing practices. But while the term “advertising injury” on its face may sound comprehensive, its definition in the insurance policy may be narrower than you think. As a result, some businesses have received a rude awakening after learning: (1) they are being sued for false advertising; and (2) their insurance company is not going to pay for it.

Vitamin Health faced this exact situation after it was sued by Bausch & Lomb based on advertising that promoted the health benefits of its Viteyes® supplements for eye health. Vitamin Health’s ad campaign promoted the supplements as “AREDS 2-Compliant,” which means they contained a combination of vitamins recommended by the National Eye Institute’s Age-Related Eye Disease Study (AREDS). Bausch & Lomb filed suit against Vitamin Health for patent infringement, but later amended its complaint to add a false advertising claim after Vitamin Health “change[d] the formulation” of its eye supplement so that it was no longer AREDS-2 Compliant. According to Bausch & Lomb, Vitamin Health reduced the level of zinc in Viteyes® from the AREDS-recommended 80 mg to 25 mg, rendering the product no longer compliant with AREDS 2.Continue Reading Insurance Coverage for “Advertising Injury” May Still Leave Businesses on the Hook for False Advertising Claims