Antitrust Law Daily Wrap Up, ADVERTISING—SDNY: Celebrity Status Not Needed to Pursue Lanham Act False Endorsement Claims, (Dec 12, 2012)

By William Zale, J.D.

The use of photographs of “well known” fashion model Iuliana Bondar to advertise LASplash cosmetics could constitute false endorsement under the Lanham Act and the New York common law of unfair competition, even though it was unlikely that the public at large was familiar with Bondar, the federal district court in New York City has ruled (Bondar v. LASplash Cosmetics, December 11, 2012, Scheindlin, S.). Bondar’s New York statutory right of publicity claims against LASplash and photographer David Byun were time-barred under the single publication rule, and the court also rejected claims of unjust enrichment and fraudulent misrepresentation.

Bondar has appeared in fashion magazines, advertising campaigns, and runways across the world, walking for designers including Donna Karan, Marc Jacobs, and Vera Wang, the court said. Byun photographed Bondar for a payment of $1500 after he allegedly told a representative of her agency that the shoot was a small makeup job solely for a product test. Bondar did not sign a release and alleged that she would not have agreed to be “the face” of LASplash. LASplash used the images in an advertising campaign for its cosmetics.

Bondar asserted five causes of action against defendants including LASplash and Byun: (1) unfair competition and false designation of origin under the Lanham Act; (2) unfair competition under New York law; (3) unjust enrichment under New York law; (4) violation of the New York Civil Rights Law Sections 50 and 51; and (5) fraudulent misrepresentation (against Byun only). The defendants moved for judgment on the pleadings.

False Endorsement

Section 43(a) of the Lanham Act prohibits any person from making a misrepresentation, in connection with an item in commerce, which is “likely to cause confusion . . . as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person.”

The defendants argued that Bondar is not a celebrity, and celebrity is needed to state a false endorsement claim under the Lanham Act. They urged that the strength of Bondar’s “mark” is too weak, as a matter of law, to cause consumer confusion. Bondar replied that only a likelihood of consumer confusion, not high-wattage celebrity, is required to state a false endorsement claim, and that she sufficiently alleged a likelihood of consumer confusion.

Bondar had the better argument, the court determined. The Lanham Act does not require celebrity, only a likelihood of consumer confusion. The court acknowledged that misappropriation of a completely anonymous face could not form the basis for a false endorsement claim, because consumers would not infer that an unknown model was “endorsing” a product, as opposed to lending her image to a company for a fee. However, there is a level of consumer recognition short of celebrity capable of causing consumer confusion, according to the court.

The strength of a mark is normally a question of fact, and the court saw no reason to depart from this general rule. Bondar alleged that she is “well known” fashion model, who has appeared on catwalks for prestigious designers and has been featured in a number of popular fashion magazines. It was unlikely that the public at large is familiar with Bondar. However, it was possible that discovery would indicate that her mark is strong enough to cause a likelihood of consumer confusion, the court said. For example, a survey could prove that the public is familiar with Bondar’s face and believes that LASplash’s ads imply her endorsement.

The allegation of the strength of Bondar’s mark survived dismissal on the pleadings. The unfair competition claim under New York law was subject to the same analysis as the Lanham Act claim, except for the additional requirement of bad faith. If true, the allegation that “[LASplash] engaged in the unauthorized use of Bondar’s images worldwide” in an attempt to trade on Bondar’s mark would show bad faith on the part of defendants, the court found.

Right of Publicity

Bondar did not dispute that (1) a one year statute of limitations applies to right of publicity claims under the New York Civil Rights Law Section 51; (2) such actions accrue upon the offending first publication; and (3) LASplash used her image in nationwide advertisements for lip gloss, eyeliner, and eye shadow more than one year prior to the commencement of this action. However, Bondar maintained that a separate claim accrued when LASplash used Bondar’s image in March 2011 to advertise an eye shadow base.

The target audiences of all of LASplash’s advertisements apparently were the same: consumers of cosmetics, the court said. Exhibits annexed to the fourth amended complaint and LASplash’s verified answer revealed that the same images of Bondar were used in March 2011 as had been used fourteen months earlier, with only minor alterations. The March 2011 promotion did not constitute republication of Bondar’s images, and the court granted judgment on the pleadings on the right of publicity claim. Bondar’s common law unjust enrichment claim based on unauthorized use of her image was preempted by the New York Civil Rights Law.

Fraudulent Misrepresentation

The only allegation of a fraudulent statement was that “Byun stated …[that] the Photo [S]hoot was[] ‘a really small make up job for a friend of mine’ consisting solely of testing for a product.” The court dismissed the fraudulent misrepresentation claim for failure to allege with particularity the circumstances of the fraud.

Because Bondar already had amended her complaint three times, judgment on the pleadings without leave to amend was granted as to the right of publicity, unjust enrichment, and fraudulent misrepresentation claims. Judgment was denied on the Lanham Act false endorsement and New York common law unfair competition claims.

The case is No. 12Civ1417 (SAS).

Carlos M. Carvajal (Hartman & Associates) for Iuliana Bondar. Richard De Palma (Thomson Hine LLP) for David Byun. Alan F. Kaufman (McKenna Long & Aldridge LLI) for LASplash Cosmetics.

Cases: Advertising NewYorkNews