TM scholars’ roundtable part 2

Session 2: Proxies for Distinctiveness; Proving
Distinctiveness (and Secondary meaning); Strength of a Mark
Do current doctrinal tests properly assess actual consumer
reaction to purported marks? What is and should be the role of consumer surveys
in proving secondary meaning (or genericness)? What is the role of other
disciplines (linguistics, psychology, marketing) in proving consumer perception
in the context of trademark litigation (as opposed to policy formation)? Are
the factors identified by current doctrine ideal/helpful? Are current
procedural devices such as the presumption of secondary meaning based on time
of use, or the concept of incontestability, useful in identifying marks that
have reached particular thresholds? What is the relevance of strength of a mark
for the scope of protection it receives? Is the concept of incontestability
relevant to scope? How does one assess the scope for a composite mark that is
distinctiveness overall but clearly comprised of non- distinctive components?
Introduction:   Shari
Diamond: has an affection for surveys. 
Two kinds implicated: secondary meaning surveys are among the worst in
TM law. Reasons why: low rate that seems to be enough.  Distinct from Microsoft scenario where the
brand is so strong that people think everything software related is Microsoft
related. Control groups can be important where you’re worried about pure
guessing/yea-saying; it’s hard to imagine you won’t do better if you have some
version of a control. To the extent you get “from one company” you can at least
take out the bias of the particular methodology by controlling w, for example, “baking
soda” as a control product. Jacoby would say this isn’t a causal Q so you don’t
need a control; it’s not just a causal Q but a methodological flaw to not
control for yea-saying and guessing. 
Output measures: consumer sales, use in publications.  Interested in output over input measures like
marketing signals.  Spending doesn’t mean
they got it right.  Weak measure at
best. 
Genericness surveys: Pretzel Crisp case.  TTAB cancelled mark as generic; gave weight
to dictionary definitions, use by public, including use in media and third
parties in food industry, and use by D itself. 
There were opposing surveys.  Fed.
Cir. complained about whether the TTAB had treated the mark as a composite mark
rather than two pieces put together. 
Surveys on both sides sometimes trigger “plague on both houses” reaction—contributed
to bad reactions to surveys, like Posner’s. 
Surveyor’s “dark arts.”  Here,
Fed. Cir. said that TTAB should have paid attention to surveys. 
Opposing surveys: Teflon survey: Princeton-Vanguard
(registrant): 55% said it was a brand, 39% common name, 9% hadn’t heard/don’t
know.  Judge in Teflon was surprised how
well respondents did distinguishing brand & common names.
Frito-Lay’s survey: 41% said it was a brand, 41% common, 18%
not sure.
Look at the methodology. 
We haven’t resolved the best way to do these surveys.  What would have been the right way?
First one: 18+ screened for purchase of salty snacks; tested
on understanding of difference b/t common and brand name, and only 64%
qualified. Control brands: Cheese Nips, 85% correct, Flavor Twists, 48% correct,
Sun Chips, 96% correct.  Control common
names: Onion rings, 91% correct; Gourmet Popcorn, 72% correct, Macadamia Nut,
92% correct.  Pretzel Crisps, 55% Brand
name.  (Flavor Twists was a related
brand.) 
Frito-Lay, similar group. 
Definition of brand/common given and asked whether they understood—2 said
no and were excluded.  Control: Ritz
Bits, 82%, Lucky Charms 87%, iPod 61%, American Airlines 89%, Triscuit
80%.  Common: Ginger ale, 72% correct,
Automobile, 91%, Potato chips 90%, Newspaper 93%, Popcorn 93%.  41% said Pretzel Crisp was a brand, 41% said
common name.
Is it good enough if you exclude 1/3 of the people being
tested?  Details of survey construction
are really important, and to the extent that we don’t have agreement on best
way to conduct them we won’t get really good evidence from the surveys. 
Bently suggests broad range of common names might focus
attention differently v. salty snacks.
Diamond: it’s possible—it’s an empirical question.
Ramsey: results are in the middle!
Diamond: usually in generic area, above 50% is good, but
that’s a decision for the court.
McKenna: what’s the margin of error?
Diamond: has to be computed. 
[My quick lookup suggests for around 250 people, it’s around 2.7% at the
.05 confidence level.]
Litman: do we know what affect not training people and just
asking them if they knew the difference had?
Diamond: it depends. If you think people will tell you they
know but just flip a coin, it would have one result; if there is a systemic
bias you might get results.  Might be
difficult to exclude such a high number.
McKenna: but those people aren’t relying on marks when they
buy, if they can’t tell the difference b/t car and Chevrolet.
Rebecca Tushnet: Maybe even outside inherent distinctiveness
the concept of TM distinctiveness is not empirical. Tom Lee et al.’s work:
putting a term in the TM place on a box makes consumers identify it as a mark,
unless the term is generic.  But even if
you think for efficiency reasons (even setting aside competitive need reasons) we
should still be distinguishing types of word marks w/o focusing on their
placement, the category of suggestiveness is not empirical, and I now think suggestiveness
should simply be eliminated/collapsed into descriptiveness and secondary
meaning always required.  At the same
time, 5 years of exclusive use for a main word mark is probably a decent proxy
for the non-empirical idea that someone should’ve shown up and made your use of
that main word mark non-exclusive. 
Interestingly, PTO regularly rejects 5 years alone when it’s dealing
w/trade dress, and I think that’s right. 
But what rules should we have other than word/trade dress?
My obsession w/the consumer who does not know enough to ask,
to borrow from the Passover Seder: that is likely to be a big component, and
thus particularly hard to test b/c answers so easily distorted when there’s no
preexisting opinion.  Franklin &
Hyman: different answers depending on what stimulus—what they imagined, what
they expected, what they saw.  Perhaps
this is another consideration favoring a less empirical approach.
Incontestability as proxy: increasingly makes sense to me.  Admits there’s nothing empirical about it.
Strength and scope: always been a current in the First
Amendment/parody cases that strength can decrease likely confusion.  I always like to teach with Lollipops and
Jellybeans for skate rinks: similarity confusing, but one reason is b/c the
mark is conceptually strong for skate rinks but lacked marketplace
strength.  Affiliation confusion fights
back against that insight—it admits that consumers will distinguish from the well-known
brand but claims that consumers will interpret
the difference in a particular way that means they’re confused.  It’s a way to put a fundamentally nonempirical
concept on the TM owner’s side.

What about strength of D’s mark?  House
mark arguments are often made.
Fromer: composite mark issues matter—Pretzel Crisps bag has
a particular appearance; might come to mind for consumers even if they’re only
being asked about the word mark. Goes back to the Lee et al. study.  Not even clear what we’re pinning down in the
questioning!  Trademark claiming: 2D in
terms of having a mark and a class of goods/services.  Surveys ask about symbols only, but take
advantage implicitly of product category—petitioner’s survey may have been
using lots of salty snacks and therefore priming consumers to think about the
many salty snacks out there.
Is there a way to use metastudies to help here?  Courts have a duty to understand why they get
different results, and metastudies have been useful in that regard to explain
why different studies come out differently.
Role of empirical work in what TM law/policy should look
like?  Surveys are presenting case by
case empirical work. Nonempirical line of Qs is empirical too in some sense b/c
we have to decide when we want to make marks incontestable and what that will
mean, and whether we want a category of arbitrary marks. May not be case by
case but we have to figure out where and why to draw lines, some of which will
be normative but not all.
McKenna: surveys directed at words—Gucci v. Guess case, and
horrible survey accepted by court as evidence even w/net 6% confusion. General
challenge w/non word marks is we don’t have good system for forcing the P to
articulate its claim. So then it’s hard to figure out the right control—enormous
amount of gaming.
In principle, 5 years makes sense, depending on 2
assumptions: (1) PTO’s evaluation of whether substantially exclusive use has
occurred, given incentive of applicant, and (2) what happens if PTO is wrong—can
parties fight?
Affiliation confusion/house marks. Affiliation confusion is
a way of putting nonempirical concept on side of mark owners. See courts
sometimes say that house marks help w/straightforward confusion, but
affiliation confusion can make role of house mark irrelevant/complicates the
role of other factors in the assessment.
Andrew Moshirnia: Empirical weaknesses of both surveys: On
exclusion of respondents.  In a robust
study, exclusion should happen at the end, not the beginning, and then justify
why you reduced the power of your survey—people didn’t want to create a record
b/c they were scared about what those excluded people would have said.
Complicates metastudies by sculpting population.
Priming/cuing: pretest effect. Normally if you apply a
filter, you want the application to be disguised so you’re not cuing your
subject to understand what you want them to do. If you’re going to apply a
pretest, create a randomized order. [But if it’s something they don’t
ordinarily think about, training them on other examples seems like the best
thing to do.]  If we’re demonstrating
proper behavior we want them to exhibit, they want to please us.  [But they won’t know what that is, will they,
other than “classify what you think the answer is”?] Better: Pure control
w/pretest, pure experimental w/pretest, pure experimental w/no pretest.  That increases # of subjects by 50%, so it’s
more expensive. 
[he says yes, they need to know how to do the task, but he’d
do the filter last; maybe change up what examples you train them on; maybe add
a query on the amount of confidence, allowing you to work backwards to deal
w/lack of knowledge. Is the training itself the qualification, so people who
fail are screened out? Diamond says the problem w/follow ups is that it’s
consider a toggle: either the mark is generic or brand name.  Not sure what the confidence level would buy
you.  Litman says: would tell us how much
people are just giving us an answer just b/c they want to give us an
answer.  Diamond says: controls help
w/that too.  Large literature: when you
give people forced choices, they express positions but if you give them a don’t
know option they’ll say don’t know even when they do have opinions.  Mosnirnia: confidence can help you identify
people who really did want to say don’t know but want to please you.  You can’t ask them at the original question—you
have to do it afterwards, but it’s a good way to deal w/a pretest effect]
Easier way of dealing with it: Strength of feeling of
subject after they’ve made their decision—how confident are you in that
assessment? The logic often is priming will have a larger effect on people who
are unsure.
Diamond: never seen it done in litigation, lots in academic
studies.  Cost is the gorilla in the
room.
Moshirnia: if both sides are deliberately shaping data, meta-analysis
will be difficult.  Need to be able to
regroup people.  But both parties do odd
things to their data.  No exclusion is
bad—asking “do you understand?” leads people to shut up.  Filtering first is also a big statistics
no-no. 
Ramsey: Fine w/quieting title as to first to use but not
about future competitors—it costs money to challenge, and if you’re not
currently a competitor there’s nothing to do. PTO is the gatekeeper but it’s
not doing any substantive examination of incontestability, and that is a
problem. 
Linford: have same questions about incontestability—do we
have the same sort of confidence about giving incontestability for 5 years of
uncontested use after registration as we do about presuming distinctiveness
from 5 years of exclusive use? 
Still wondering what to do about consumers who haven’t
thought concretely about source significance—even for them, marks may be
communicating in ways they are recognizing, but not recognizing
consciously.  Less worried about those
who can’t articulate source significance if there is a way to figure out that
they are detecting it/attracted to it [how do you determine that they’re
detecting source significance v. detecting some other feature they desire?].
Parody: strong mark = more effective parody. He worries
about that b/c there’s something different than run of the mill likely
confusion case. At least if you buy Souter’s idea that it says 2 things at
once: I’m not the original/I’m the original. 
Dual communicative aspect won’t be the same for close follower/ordinary
copier.  Maybe a strong mark is
hypersalient so consumers notice small differences, but he’s not convinced the
parody cases teach that.
Beebe: Concept of TM strength v. affiliation confusion.  We’d [Beebe & Hemphill] like to think of
strength as increased consumer sophistication w/r/t the signifier but also
w/r/t the products w/which the brand is traditionally associated. The increased
strength may result in decreased likelihood of affiliation confusion b/c of
increased consumer knowledge. Population of individual consumers aggregated: as
strength increases, a few percentage points of consumers are no longer confused
with each increase in strength, and maybe just enough that there’s no longer
justification for intervention in the form of an injunction. 
Bone: Not sure what it means to go from empirical to
normative—if normative theory is dependent on some empirical results, then we
still need empirical results.  Genericity
is an area where we might want to think more normatively.  Canfield approach—chocolate fudge soda—when we
don’t really want to survey b/c we don’t know what to ask. Ask: Is that mark/symbol
really going to be very useful for designating a particular product class? We
will make mistakes, but we can often tell w/o surveys.
Might think about percentage of population who uses the
mark; might also think of vividness—are there many similar marks out
there?  Ability to call to mind quickly
when I see something similar?  Branding/the
more meanings it has, the stronger it is?
Litman: incontestability: the statute separates the quiet
title from the incontestability. 
Congress adopted it way back when as an incentive to register, which
Congress thought we’d need here b/c of the history of success in litigating
unregistered marks. My guess: it’s not doing that work, ever; when you want to
sell stuff in countries other than this one you have ample reasons to register
and incontestability isn’t on the radar. Do practicing TM lawyers really value
incontestability? Her guess: may give them as much trouble as it does joy.
Mid-Point Discussants:       
Michael Grynberg: human tendency to simplify is present even if that
means offloading decisions to experts, linguistics or otherwise.  Disheartening to read about how badly
incontestability is done now, b/c concept has appeal.  But changes have problems of their own.
Suppose descriptive/suggestive line doesn’t make any sense.  But then we have lots of fights about
suggestive/arbitrary line that we don’t have to worry about today.  Fromer says Apple isn’t arbitrary for
computers, Fromer’s reasons are plausible: so now what?  Another possibility: get rigorous about
secondary meaning.
Reasonable consumer exercising ordinary care: is a consumer
really exercising ordinary care if he perceives possible affiliation b/t Jose
Cuervo and Maker’s Mark based on use of a red wax seal? Might be a way to deal
w/various meanings of distinctiveness by changing standard/considering
materiality.
Litman: Likes Bone’s idea of a court appointed expert. Would
improve quality/probativeness of surveys.
Omri Ben-Shahar and Lior Strahilevitz have a paper
suggesting that courts adopt the survey mechanism to interpret contract
language.  Grass is always greener in the
other field!
Our proxies for distinctiveness are stuck in the early 20th
c. You gain distinctiveness by selling products to consumers for a certain
amount of time; it doesn’t disappear quickly. 
But today we have instant secondary meaning, as w/Chrysler’s “Imported
from Detroit,” but courts don’t have a way to deal w/that. We also have secondary
meaning that dissipates in part b/c distinctiveness is happening not just
through sales but through social media/products getting 15 minutes of fame.
Plus, different TMs have different flavors not captured by linear strength.
Affiliation confusion: Tiffany guitars wouldn’t confuse anyone; Starbucks coat
hangers. But Orville Redenbacher snow shovels—she’d believe there had to be a
relationship—it’s not that the term is inherently distinctive. It has a kind of
secondary meaning that is different from Tiffany and Starbucks.  That gives her concern not just that our categories
are old and outdated, but that they’re causing us to miss something.
McGeveran: do these need to be empirical questions? Even if
we think that the particular flavor we’re looking at is a Q of fact and not of
law, is it a Q of fact that must and should be determined in a form of
empiricism as broad as the survey? Are there more times when judges should feel
they have the opportunity to make factual determinations w/o very expensive/high
admin cost evidence? Geog. misdescriptiveness refusals aren’t adjudicated
w/surveys.  How do we account acceptance
of that other than history?
McKenna: those are almost always about registration, which
uses surveys less. Why are we so willing to avoid empiricism in registration?
Affiliation confusion becomes a black box for so much of
this.  Beebe says strong marks might
decrease affiliation confusion. Super-strong marks: consumers more aware of
differences in visual presentation. That doesn’t mean keen awareness of range
of goods and services on which they’re used. 
Brand extension literature operates on assumption that the source is in
fact the same, but at least it talks about similarities of goods and services
in possibly useful ways.  Need more
empirical literature on strength and effect on consumers.
Leaffer: Conglomeratization of American life in 20th
c. to today, affiliation confusion exploded. 
Consider the importance of subsidizing the TM office in requiring all
these submissions.
Burrell: 1920s assumptions about how consumers behave—we need
to test more generally how consumers behave before we can think about how
consumers might be confused.  We don’t
even know what nonconfusion would look like.
Dinwoodie: role of excavation both history and normative
factors embedded in distinctiveness analysis to free courts from fossilization
that has occurred.  The nuance in the
doctrine doesn’t match how the courts talk about it.
Ramsey: Defending Abercrombie.  So many judges aren’t grounded in TM.  Lawyers think it’s “soft” and they can step
in and litigate; RT’s paper shows that courts and litigants just screw up
incontestability. Doctrinal tests force parties to talk about important issues
and hopefully the judge will address them.
Dogan: when what the D does has social value, the courts
have the tools to allow the use. We can push hard on this area where there are
so many feedback loops: room for advocacy and scholarship on how courts should
think about the relationship between risk of affiliation confusion as measured
against social value that comes from informational uses of TMs.
McKenna: we’ve seen courts feel increasingly free to pick
factors, but we haven’t had a methodology for picking factors.  They may be clustering in particular ways.
Also true of different types of confusion. I read cases that could have been presented
as IIC but just weren’t; no rhyme or reason. 
Same w/sponsorship or affiliation, e.g. the Cracker Barrel case.  The court says they aren’t confusing and
doesn’t contemplate possibility of co-branding.
Beebe: most effective defense of Abercrombie is competitive
need. Is it fair to say that the factors from Zatarain’s—use by competitors,
dictionary definitions, general competitive need—compare to factors in the
European or British approach? 
Bently: court of justice drew a distinction b/t the reason
why we have an exclusion and the test. The reason is so traders can use
descriptive terms either to describe products/services or as parts of composite
marks. They put a strong emphasis on public interest underpinning purpose of
exception. But what then is the test? Whether the sign is being used or is
being capable of being used in a descriptive way of some characteristic of
product/service. Doublemint: doesn’t have to be core/essential characteristic;
can be peripheral. That means descriptiveness has quite a capacity to exclude
what US calls suggestive marks under Abercrombie.  UK registry held that “sushi” for chocolate
in the shape of sushi was not descriptive; inconsistent w/CJEU holding that it
must merely be descriptive of a quality of the goods.
Fromer: Apple for bananas: what is it on the Abercrombie
spectrum?  Level of generality issue: are
apples and bananas substitutable?
Thinking about corpora as a substitute for dictionaries, as
Linford suggests: they are useful for large-scale data. But computational
linguistics aren’t there yet for really understanding the corpus other than on
a case by case basis for an individual litigation.
Bone: imagination test: I don’t even know what that is. I
don’t know why dictionaries are important. Competitive need makes sense to him
for reasons we might want to demand a showing of secondary meaning.  Ultimate standard might be
anticompetitiveness, then develop categories where that’s less costly than
doing case by case analysis. That’s why suggestive should be thrown out—it’s
not doing anything helpful in this regard. 
Grynberg: if you get rid of suggestive, what is Penguin for
refrigerators?  [RT: I’d say don’t get
rid of it, just make them show secondary meaning.]  Consumers who have high need for cognition
may like it a lot.
Bone: sure it’s suggestive, but what does that have to do
w/TM?  I can tell a story, but the story
is about anticompetitive effects. 
McKenna: automatic assumptions about source by consumers as
a story?
Bone: no, a different starting story: why not require
secondary meaning for everything? 
McKenna: empirical presumption about what they’ll think.
Bone: just-so story.
Dogan: Might not be a problem to grant protection to
suggestive marks if we’re really strict about what suggestive means.  Breadth of protection is also important.
Suggestive = plays linguistic function w/r/t feature of product. Courts that
say that suggestive = inherently strong make for harmful consequences. We should
presume that suggestive marks w/no commercial strength are weak.
Burrell: we never truly ask people to prove distinctiveness.  We only ask some of them to prove use for a
while + expenditure of enough money on the mark.  Versus you get your monopoly straight away.
Dogan: to the extent people are concerned about automatic
protection for suggestive marks, those concerned are softened if we make the
threshold higher & allow protection only for marks unlikely to have
significant adverse effects on other players [see also: scope]
Dinwoodie: why waste time on proof when we’re pretty sure—he
still sees that as valuable. [I do too, but I’d put the line for pretty sure at
arbitrary rather than at suggestive.]
McGeveran: doesn’t agree about Orville Redenbacher v.
Starbucks—Williams Sonoma will sell shovels and popcorn. Once something is
recognized as a brand, not just as a mark, it’s probably empirically true that
many consumers might think that recognizably brand thing is slapped on is use
as a source ID, or at least as affiliation. 
We could decide not to protect those things b/c we don’t care as much
about affiliation/endorsement confusion as the current structure does, but as a
descriptive matter he would expect a perfect survey to find that many people
think the Orville Redenbacher shovel came from “the Orville Redenbacher people.”
Why are we even asking about distinctiveness in this setting? It will always be
distinctive once it passes the threshold of being a brand.
Litman: I wouldn’t assume Perdue cologne was co-branded by
chicken co.  But I spend a lot of time
trying to weed out of my students the notion that TM distinctiveness is the
same as other kinds of distinctiveness, but that’s what’s going on.  The original Starbucks design, if I saw that
on anything I’d assume that was affiliated w/Starbucks, even for toilet
cleaner. That’s got something to do w/how distinctive it is not in the TM sense
but rather in how unusual it is [what Beebe calls differential
distinctiveness?].
McGeveran: yes, but don’t then use distinctiveness as “do
you think this tells you something about where this came from.” Increasingly
the empirical Q of “could this be a Julie Andrews snow shovel” will be
answered, “sure, why not.”  If we hinge
distinctiveness on consumer perception we’ll have increasingly extensive brand
extensions.
Dinwoodie: this is really an argument about
scope/enforcement, really about dilution. What range of goods you can cover.
Litman: original Starbucks design is probably not famous;
would play badly in the Midwest.  But it
is very unusual. 
Dinwoodie: speaks to whether fame is proper requisite for
dilution.
Litman: but I’m talking confusion—there’s no reason to put
her on your product unless you’re trying to say “this comes from the same place
as Starbucks coffee.” In the sense of being affiliated with.
Dinwoodie: maybe affiliation is a dilution cause of action.
Ramsey: But what about the Orville Rockenbacker shovel?  Consumer would probably think it’s parody.
Unrelated goods—you really need identity or virtual identity.
Linford: stronger anticompetitive = generic; weaker
anticompetitive effect = descriptive. Competitive need is the first order
question we’ve been assuming w/suggestive marks. We’ve been using imagination
test as proxy for lack of competitive harm. Maybe courts should say expressly
that they’re not trying to categorize but trying to think about what the
competitive harms.
RT: Concerned about courts that call suggestive marks strong
too, but interestingly I think that’s increasingly less common than it was 10 years ago (but would need to do more
empirical work to be sure).  Conceptually
related to the idea of whether incontestability has any effect on strength?
Want to bring in descriptive fair use and courts’ confusion
about the problem of descriptiveness in that context: Car Freshner—court of appeals
dodges the real issue; if D’s use is descriptive, P’s use is sure as hell
descriptive.  Being more aggressive about
melding suggestiveness into descriptiveness might have helpful consequences or
troubling ones for descriptive FU.  See
also the Victoria’s Secret case about “delicious,” where the 9th
Circuit says that use of the term to describe the wearer would not be
descriptive use.  Whaaaaat? Finally:
consider treatment of retrievers/dog images by PTO early in internet era.  Thought the idea of the retriever dog was
highly descriptive in the context of internet search; probably isn’t any more;
probably didn’t do much damage by requiring retriever image users to wait, but
other lessons could be taken from this episode about the ability of the PTO to
predict uses.]
McKenna: Always driven me crazy for courts to say there are
2 components to strength. If it’s empirical, it’s conceptually impossible that
use by a different party for different goods and services can disrupt the
strength of the connection b/t my mark and my goods.  Penguin for refrigerators doesn’t affect
Penguin for hot dogs.  It’s not a
nonsense question if you’re giving TM owners an incentive to pick something at the
higher end of the spectrum. 

All of us have gone to the really high end of the spectrum
for “brands.”  But there are also
run-of-the-mill TMs where they are measuring how likely the mark is to cause
consumers to think that use in another field is from the same party.  

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TM scholars’ roundtable

Ninth Trademark Scholars Roundtable: Distinctiveness,
Secondary Meaning, Reputation And Fame
Chicago-Kent College of Law
Session 1:      
Distinctiveness (including Secondary Meaning) as a Legal Concept
Introduction:   Barton
Beebe: different approaches. Any general claims about distinctiveness must take
into account: eligibility for protection/scope of protection; reality v.
policy; words v. non-words; perception by single consumers v. aggregate; consumer
search costs approach v. product goodwill approach; US v. EU. 
Eligibility v. scope: Many claims about distinctiveness work
in both contexts, but keep it in mind. Psychology of individual consumer v.
amorphous crowd of consumers. Some might see a mark as fanciful, others as
arbitrary.  Is this claim about consumer
protection, or is it a claim about what consumers should think?  Doctrine as both descriptive and
prescriptive. Non-words: Abercrombie
doesn’t work for them (if it even works for words).  Consumer search costs approach to TM v.
producer goodwill—Bob Bone’s work. If our emphasis isn’t minimizing search
costs but facilitating production of goodwill, does our concept of
distinctiveness work the same way?
What does it mean for a mark to ID a source?  My answer: a mark is distinctive of source in
the sense that a consumer believes it refers to one source as opposed to
multiple sources [or as opposed to nothing about source?].  Secondary meaning survey: you ask whether it’s
one source or more than one source. This also goes to inherent distinctiveness
analysis: having never heard of this before, do you think that this term is
referring to one company alone or is being used by other companies?  This approach works ok for eligibility, but
not as well as determining the extent of distinctiveness. Eligibility seems
like a binary determination, but scope is not.
Distinctiveness of source
is one thing; distinctiveness from other
marks is a different thing.  Strength or
scope goes to distinctiveness from
other marks.  Does it stand out to the
marketplace.  A lot of times law pretends
to talk about distinctiveness of but is really concerned with distinctivenss
from.
Jake Linford: What do we think we’re doing w/TM law?  Are consumers confused/are we protecting
consumers/are we giving consumers tools to pick in market? Are we incentivizing
marketers to pick clear signals/making space for new entrants/protecting
property rights?  Which is most important
to you will determine how important you think it is to get Abercrombie spectrum
right—we want our TM validity thresholds to dovetail w/what consumers see; or
you may think we want to prevent incumbents from excluding competitors; or you
may think that investment should be rewarded w/right to recoup benefits. For
example, Linford’s piece on per se bar on generic terms looks at what consumers
might expect to see given how language changes over time; if we care most about
that, we might not want a per se bar. But if we want to maximize something
else, there may be no way to reconcile those goals at the margin.
My answer to Q about current tests: they don’t properly assess
inherent distinctiveness. Even fixing Abercrombie
wouldn’t necessarily generalize to symbols/trade dress etc.
The research we look at has its own assumptions—linguistics has
a descriptive bent. Consumer marketing research is designed to help mark owners
to be more persuasive. If our normative baseline is providing entry space for
new competitors, marketing research may not be the best toolkit v. protecting
incumbents’ ability to persuade consumers.
Assume you’re persuaded by Jacoby’s description of how minds
work: chunking, spreading and activation—mark becomes salient in way that
drives consumer decisionmaking. Lockean Q: is it work that owner has done that
deserves to be rewarded as such? How much of that is due to consumers
themselves (Litman, Breakfast w/Batman)? 
Nestle cases—this Q preoccupying Euro courts is whether consumers are
relying on the mark to find the product they seek, or are we just looking for
association?  Affiliation sounds like
association; these cases seem to be trade dress or color cases, marginal areas
generally—do the things we see in limits in European law deserve
importation?  Is reliance the right
question?  Initial instinct is to resist,
but not sure why.
Does it matter which term we use to describe
distinctiveness?  Acquired
distinctiveness v. secondary meaning—acquired seems Lockean/merit-based.  Secondary meaning seems to presume primacy of
primary meaning. That’s what he sees as error in per se bar of generic terms
acquiring distinctiveness.  Source
significance seems to him to be more neutral. 
Timberlake thinks only source significance matters; McKenna is worried
about other things as well.
Discussant:      Stacey
Dogan: Key motivator for TM is interests D is representing, either individually
(justification for own use) or more generally (interest in protecting freedom
to use descriptively).  Some combination
of economics, informational, and moral rights concerns—protecting investments
of mark owners. The way that distinctiveness comes in is that courts look at a
mark as used w/a product, and they say not just is it serving source ID
function but what are the costs associated w/allocating rights in the term to
this one party.  Arbitrary/fanciful: the
costs are low, even if they haven’t yet penetrated consumer consciousness. They
don’t serve an important info function in the marketplace yet, but someone else
who adopts the mark for a similar product lacks justification.  “Technical TMs.”  The reason the D is using the mark has to be
unsavory.
Protecting innocent motives also reduces obligation of
innocent parties to do too much search, esp if mark is fairly descriptive/not
well known w/in a particular geog. area. 
Similar questions w/different product markets.  W/real fame, there’s no justification for
anyone anywhere to use.
RT: Beebe’s answer to What does it mean for a mark to ID a
source?  Beebe’s initial answer: a mark
is distinctive of source in the sense that a consumer believes it refers to one
source as opposed to multiple sources. But those aren’t the only 2
possibilities: perhaps the consumer believes nothing whatsoever with respect to
source.  [2 sub-options: (1) consumer
believes it isn’t supposed to signify source but is something else, e.g. design
or decoration; (2) consumer thinks nothing of it at all unless prompted, and
thus will give random answers.]
Graeme Dinwoodie: how one operationalizes that—looking at
differences b/t mark and other signs rather than the meaning of the goodwill,
which Beebe may mean by distinctiveness of source.  Kind of a patent analysis—how far are you
away from the prior art?  Unless a
crowded field then has an effect on the first question—one kind of
distinctiveness may inform the other.
Dogan’s account of distinctiveness was more normative than
he teaches.  Sense that her take is more
normative than evident in courts’ explicit analysis of distinctiveness.  [Though see KP Permanent/Sealed w/a Kiss case—that’s
a risk the D took when it adopted a descriptive mark.]
Beebe: Seabrook
test is a “distinctiveness from others” test that ultimately is used to answer “distinctive
to consumers” question.
Jeanne Fromer: We conflate inherent/acquired distinctiveness
in many circumstances, but the concepts are distinct. And they’re deeply
distinct—people emphasize one value over another; Ramsey is interested in
inherent distinctiveness more, while Linford values acquired distinctiveness.
Lionel Bently: should the fact that there is a descriptive
use defense mean that we shouldn’t be so bothered about the negative effects of
registering a descriptive term?  UK
courts traditionally say we are still concerned b/c registration is so powerful—trader
shouldn’t have to look to a defense to use a descriptive term.  The ECJ in Windsurfing decision did that too.
Agree w/RT that often consumers don’t see a TM relevant
thing at all.  One thing we might want to
take into account is people’s views when they’re not consumers.  Why do we arrive preformed as consumers
instead of as social or political beings?
Differences b/t distinguishing as source and distinguishing
from others’ marks.  We see
internationally and in EU law the notion of distinctive character for
maintenance purposes.  You can maintain a
mark that’s different from what’s on the register as long as it’s not enough to
change the distinctive character.
Mark McKenna: difference b/t priority and nonpriority
dispute screams out from cases. Way courts evaluate use and distinctiveness in
priority is hermetically sealed from other contexts precisely b/c they know
someone is going to get the mark; it’s just a question of who.   We start w/a rough empirical cut and then
layer other concerns on top—industrial policy concerns.
Ambiguity of “source”: the fact that people are used to seeing
something w/one producer is often used as evidence of TM meaning, but that’s
not the same thing.  Association isn’t
association as an indicator of source. Hardest w/non-word mark cases; there are
lots of other possible explanations for consumer reactions that we should consider. 
Robert Burrell: The market should often correct itself in
terms of mark choice.  Market failure may
occur when businesses are starting out they need to be encouraged to choose TMs
that will serve as badge of origin rather than just being concerned w/market
penetration. But that reasoning would suggest that experienced firms wouldn’t
select descriptive terms, but they do. 
People don’t spend a lot of time thinking about “what is the badge of
origin”? They’re just buying stuff, in response to all sorts of different
signals. So we are trying to protect competitive signals, knowing that
consumers will be responding to lots of signals that have nothing to do with
source identification. Once you’re honest about that, our perspective on
infringement would have to change.
McKenna: registrations that issue with purported limitations
that won’t matter at all in litigation—that’s a huge problem. B/c the PTO is
thinking only about validity it doesn’t deal w/that problem.
Linford: This Q of what a registration does is implicit in
the struggle w/Tam. 
Bob Bone: characteristics of the mark may be probative for
consumer protection. For eligibility what we’re talking about is percentage of
consumers who use mark as source ID in strong sense.  Rough, normative determination of percentage.
For scope, then we are talking about strength, and how distinctive it is w/r/t
other marks. But he doesn’t think we ought to do that for eligibility.
Inherently distinctive marks aren’t distinctive; they’re just really likely to
be distinctive.  That has to be qualified
by what Fromer said—maybe we’re protecting inherently distinctive marks for
incentives for firms that are beneficial down the road.  But if it’s just likelihood/probability of
distinctiveness, that’s a different issue. Probability has to be assessed in
some way.  Probability is both a
descriptive and normative issue.
Beebe: will stick by his own definition but wants to restate
it & explain why.  Distinctiveness is
ten-dimensional—w/r/t inherently distinctive marks that are word marks, if you
accept consumer search costs approach in the US, then we can say this.
Otherwise it’s hard to say something general. 
Gives the whole system a flexibility. 
That’s why his approach is: one source/multiple sources. If a signifier
doesn’t refer to a source at all: you ask consumer whether a plain box is used
by one company or more than one company. 
I want to hold on to anonymous source company.  Do you associate this box with one company or
more than one company?  Or is it not
associated with a company?
RT: but you didn’t offer that third option, “not associated,”
in your first formulation.
Beebe: one company, more than one company, or is it
meaningless to you?
McGeveran: do you associate this with one company or don’t
you?
Dogan: if one company has been selling this box for 17
years, the fact that people recognize it as coming from that company is source
significance, but this is where competing values like functionality come into
play—even with source significance, it’s functional.
McKenna: there’s also a difference b/t association w/ a
company and thinking it’s an indication of source.
Beebe: the cases in the US aren’t so much on your side.
Michael Grynberg: dichotomy of distinctiveness: do we want
it simple or nuanced?  Lawyers can advise
clients on the multifactor test, which is a virtue of the system v. accuracy at
margins.
Dinwoodie: use as a mark as a test for validity might be a
way to reframe some of this as distinct from distinctiveness.  Also, significance of inherent
distinctiveness has increased as more and more applications are ITUs, which are
supposed to be inherently distinctive. 
Mid-Point Discussants:           Lionel
Bently: EU: Categories of marks devoid of distinctive character, descriptive,
generic: overlapping, informed by different concerns but capable of being
applied cumulatively—treat them as less important than Abercrombie. Devoid of
distinctive character: generic, descriptive, signs that would not be recognized
as TMs.  Applied in that sense primarily
to nontraditional marks.  Test: whether
there’s such a difference from the normal shape or presentation that the
consumer would notice it.  Different
tests for secondary meaning?  We could
apply different tests/showings in relation to potential problems. 
Surname cases: demand to show secondary meaning is a little
odd. Either the reaction is always “it’s a TM” or it sends us into a sea of
uncertainty (e.g., you see “McKenna” on a bottle of beer—people will arguably
automatically see that as a TM if it’s in the right place on the bottle;
otherwise not).  Burrell says this is a
waste of time. We should focus on normative side—what are the reasons not to make this a registered TM, which
makes us think much harder about what’s wrong w/registration. That would be a
good thing.  One key: depletion of marks
otherwise available to competitors. Cultural signifiers—Picasso for cars may
cause a different sort of harm, whether we call that dilutive or not.
Distinctiveness of Red Cross.
All the considerations in determining inherent
distinctiveness suddenly vanish in the face of acquired distinctiveness b/c of
our interest in consumer search costs, which becomes the most important thing—protecting
against even a bit of confusion trumps everything but functionality. (And
genericism in the US; not in the EU.)
Lisa Ramsey: See anti-free riding impulse throughout the
cases, in registration and enforcement. Plus consideration of competition and
free expression.  Dilemma: Poor small
businesses can’t afford to do a TM survey. Perhaps it’d be good to have a
survey required for colors/designs, but small companies can’t afford that. If
we really believe in competition, we need to make it easy for small companies
to get protection [or hard for big companies to get monopoly rights over
persuasive designs], but they can’t do that w/a high bar for protection at the PTO.
So how do we define distinctiveness? It has to be normative.
Intent of TM owner: make everything a TM.
McGeveran: never had as much debate over semantic meaning of
thing that’s our topic. What if we banned the use of the word distinctiveness
from the conversation and forced ourselves to rechristen everything we now call
distinctiveness? Which of these things would we give the same name to, and
which would get different names?  Would
help us think about them differently. One of Beebe’s binaries—distinctive from
other marks v. distinctive as indicator of source in mind of consumer. Suppose
one was source consciousness/identification v. mark differentiation? We wouldn’t
use the same words b/c they’re not the same. 
Market strength—is that a measure of the amount of source consciousness?  Or is it a different thing?
Most important thing Coke wants is branding, not
identifying: Coke is refreshing. They use the doctrinal tools of lawyers to
achieve business objectives. B/c we refuse to acknowledge that’s what they’re
doing as often as we should, we tend to go down blind alleys. If we asked a
marketer “how is your brand distinctive” they would not say “people know Coke
when they look at it” but rather “Coke is relaxing and Americana.” That’s their
distinctiveness, and our doctrine is almost blind to it.
Michael Grynberg: does Coke need our distinctiveness for
theirs?
McGeveran: they certainly want that, but it’s a minority
percentage of time and energy poured into the process—necessary but subjugated
in broader ass’n of branding. We could make a decision that the law protects
source consciousness but not other forms of marketing distinctiveness.  That’s fine. 
The market will handle that. The problem is that it shapes the ways in
which firms want to use these marks as tools. They’re going into battle for
branding reasons; if we are blind to that as we construct doctrine, that
creates problems.
Fromer: It’s really important to think about incentives
here. That’s why I care more about choosing some marks over others than perceptions;
over time, businesses can foster perceptions for just about everything, so we
should think about the costs of allowing companies to choose certain marks over
others.  Goes to Bently’s point that we
want to keep some words/symbols from being branded, like Red Cross. If we have
buckets for types of marks, we still have to shape the buckets and figure out
which costs companies should have to bear. 
Throwing dilution in: dilution gets a lot of things wrong, but one of
the ways in which it’s interesting is the way it thinks about distinctiveness.
Mostly equates dilution w/impairment of distinctiveness, but takes degree of
inherent/acquired distinctiveness into account: might mean it’s much harder to
dilute Amazon/Infiniti w/lots of other meanings out there already, but it is
taking account of network of associations. 
Jacoby is so focused on his model from a marketing
perspective, w/o accounting for the costs. 
Apple isn’t “arbitrary” in the marketing sense—they choose a bitten
apple signifying knowledge, friendliness, etc. 
Maybe we didn’t connect apples-computers before that but there’s only
one link in the nodes required. Maybe we want to encourage businesses to find
those latent connections, but we need to think through both costs and benefits.
Shari Seidman Diamond: People out there w/no views at all.
When we ask those questions, it’s not tapping into things people naturally
think about. It does matter that we have asked the question.  They will obligingly give you an answer,
mostly, despite filters/don’t know options. 
If it’s true they’ve never given any thought at all to whether this came
from one source or multiple sources, that is an important feature that we may
be missing.  If it’s allegedly useful for
search cost reduction, if they weren’t thinking about it before it can’t have
been useful for search cost reduction.
McKenna: Dilution is hot mess. “Impairment of
distinctiveness of mark” is nonsense. Doesn’t decrease identifiability of
source significance in product market, though it does deal w/uniqueness, and
maybe distinctiveness of mark v. distinctiveness of brand.  Distinction b/t TM and brand is really important.
When you say Apple signifies knowledge, it’s still arbitrary in Abercrombie spectrum, in terms of
branding/associations brought along with it. 
We sometimes see push & pull about smushing those together; courts
are susceptible to arguments in brand terms and it’s important to be clear
about what we mean.  Context is usually
the whole point of distinctiveness but dilution takes it away from context.
Marshall Leaffer: In registration context, should be pretty
low bar—not necessary to spend lots of resources for something that’s fairly
clearly inherently distinctive for arbitrary/fanciful. But secondary meaning is
a whole different kind of utility. Not competitive entry so much—we are simply
rewarding//providing incentives for those who invest in the goodwill of the
mark.  There it should be a very high bar
for secondary meaning.  Percentages
required go quite low in some cases, though. 
That is a wrong turn. We have a lot to learn from marketers: what they
engage in, from brand/image aspect, is so important to developing strength.
Dinwoodie: European law: parses out different grounds, all
of which look like variants: descriptiveness, void of distinctiveness,
incapable of distinctiveness in 3(1)(A)—gives value to the notice function.
Series of different categories for denying—failure to provide the notice
necessary to competitors; distinctiveness; normative question of competitive
effect; and genericness is a bit of a mix. Force courts and Office to
pigeonhole them, and in fact we give different consequences.  Can’t overcome 3(1)(A).  Trying to separate predictive questions from
normative—if you don’t do that consciously, the normative operations get so
submerged in the analysis that we think it’s purely empirical w/o assessment of
competitive concerns.
Bone: why not get rid of eligibility inquiries? Could have
exclusions for non-distinctiveness reasons, like the bar on names w/o
consent.  But as to 2(e) categories on
descriptiveness, why bother?  When we get
to likely confusion, that requires source identification.  Do we figure that we need an initial screen
for likelihood of confusion?  Maybe we
do. If we were to redo this w/o eligibility via Abercrombie, what sort of screens would we use?  Normative reasons—litigation costs, threats
to competition/overreaching, etc.  Error
costs.  We might end up with the EU/Paris
Convention.
Dinwoodie: that’s a strategic reason why too much gets
forced into distinctiveness. If you limit countries’ ability to create
exceptions, there’s nothing for functionality/names, so the Fed. Cir. shoves
everything into distinctiveness to create exceptions.
[RT] Responding to McGeveran and Leaffer. Branding: we don’t ever want to protect the branding
kind of meaning of distinctiveness. It’s not unique or distinctive.  Coke: Americana, like Ford?  Refreshing, like Winterfresh gum?  Even if Coke’s branding is truly unique in its
category, those are generic and functional concepts that should be available to
anyone who successfully appropriates them even w/in that category. That’s
precisely why we shouldn’t be embracing branding ideas and how we should
distinguish: personality of mark is not what the law is or should be here to
work on.  Dilution: has to arise from
similarity of marks.  That singles out a
specific mechanism for associations and a specific effect distinct from meaning or “brand personality.”
Factual Q: Do we know how many secondary meaning
registrations rely on 5 years of exclusive use v evidence of consumer reaction
or even along w/evidence of consumer reaction?
When we separate normative and descriptive Qs as many
including Dinwoodie advocate we find they’re orthogonal. Look at KP Permanent:
incoherent result on remand.  Tolerate
more confusion—how much more?
McGeveran: not advocating using the law to protect branding
components, merely to point out that those get identified as distinctiveness
and that’s one reason it causes problems; clear delineation can avoid
conflating them.
Linford: is there a way to figure out whether consumers have
ever thought about this before, empirically?
Diamond: yeah, consumers want to sound smart and would say
they’ve thought about it before.  There
are some responses, not so much in design of the Q but design of the survey as
a whole, also getting to the issue of needing only a low level on secondary
meaning.
McKenna: Abercrombie came out of a history of sorting b/t
technical TMs and unfair competition; over decades we’ve layered other considerations
on top that weren’t the function of what the distinctions were for. We’re still
in so many settings dealing w/cts’ merger of two areas of doctrine w/o
sufficiently thinking of the relation b/t them.
Consider the fact that there was a time when if you asked
anyone a computer-related Q people would associate it w/Microsoft. You can wash
that out as noise but it’s real association. If you merge source significance
w/association you can’t deal with that.

Beebe: 4% registered either in whole or in part on the basis
of 2(f)—incredibly small.  Filings for
marks acquired distinctiveness has risen in absolute numbers over the years,
though decreased as a total percentage of filings.

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IP writing competition for Virginia law students/law students from Virginia

INTELLECTUAL PROPERTY
LAW STUDENT WRITING
COMPETITION (2017)
Sponsored by the
Virginia State Bar Intellectual Property Law Section
The
Virginia State Bar Intellectual Property Law Section is seeking papers written
by law students who are attending law school in Virginia or are residents of
Virginia attending law school outside of Virginia and relating to an
intellectual property law issue or the practice of intellectual property law.
PRIZE: $5,000
Plus publication on the IP Section’s website
The IP Section may also award a Second Place prize of $2,500 in its
discretion.
for complete rules and information about prior winners.

ENTRY
DEADLINE: MAY 26, 2017

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Reading list: a credit card nudge that seemed to work

The power of light-touch financial education: A demonstration with credit card revolvers
JAN 19, 2017

Can simple guidelines, or rules to live by, help consumers reduce their credit card debt? Can they be useful as a financial education tool? The Consumer Financial Protection Bureau (CFPB) commissioned a research study to test two specially developed guidelines reminding consumers to be cognizant of credit card usage. The guidelines were tested in a randomized controlled trial with a large group of consumers who carry a credit card balance month to month. The study found that exposure to one of the two financial guidelines (“Don’t swipe the small stuff”) led to lower credit card balances. Findings suggest that rules-based messages hold promise as a low-cost, scalable method of financial education.

FULL REPORT

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Reading list: new governors of online speech

Harvard Law Review, Forthcoming
Abstract
Private online platforms have an
increasingly essential role in free speech and participation in democratic
culture. But while it might appear that any Internet user can publish freely
and instantly online, many platforms actively curate the content posted by
their users. How and why these platforms operate to moderate speech is largely
opaque.
This Article provides the first
analysis of what these platforms are actually doing to moderate online speech
under a regulatory and First Amendment framework. Drawing from original
interviews, archived materials, and leaked documents, this Article not only
describes how three major online platforms—Facebook, Twitter, and
YouTube—moderate content, it situates their moderation systems into a broader
discussion of online governance and the evolution of free expression values in
the private sphere. It reveals that private content moderation systems curate
user content with an eye to First Amendment norms, corporate responsibility,
and at the core, the economic necessity of creating an environment that
reflects the expectations of its users. In order to accomplish this, platforms
have developed a detailed system with similarities to the American legal system
with regularly revised rules, trained human decision-making, and reliance on a
system of external influence.

This Article argues that to best
understand online speech, we must abandon traditional doctrinal and regulatory
analogies, and understand these private content platforms as systems of
governance operating outside the boundaries of the First Amendment. These
platforms shape and allow participation in our new digital and democratic
culture. They are the New Governors of online speech.

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Iconic movie scene allows copyright but not TM claim against multimedia installation

Harold Lloyd Entertainment, Inc. v. Moment Factory One,
Inc., No. LA CV15-01556, 2015 WL 12765142 (C.D. Cal. Oct. 29, 2015)|
Another blast for the past—I would really like to know more
about the Westclip algorithm, but I can’t complain too much about the magic
machine that brings new knowledge straight to my inbox.
HLE sued Moment for copyright infringement and false
designation of origin based on HLE’s copyright in the 1923 silent film Safety Last, starring Harold Lloyd.  “The film’s closing scene features its
principal character, played by Harold Lloyd, dangling from the hands of a large
clock.”  Moment’s multimedia work, the
“Time Tower,” included a video of a man dangling from the hands of a large
clock.  The final chase/climb scene in Safety Last is about seven minutes long;
Lloyd dangles from the clock for about a minute. HLE licensed the Clock Scene
for use the films Back to the Future
and Hugo for scenes in which a
character dangled from the hands of large clock.
 

Lloyd scene

Comparison from complaint

screenshot from video of installation

The Time Tower video is 87 minutes long, with 14 distinct
segments.  One segment is “Silent Movie,”
lasting nearly three minutes; it features a man climbing a building past
various characters, “including a knight in shining armor, a monster reading a
newspaper, a conductor and a socialite.” As part of various shenanigans, the
climbing man grabs the hands of a clock that is on the outside of the building,
and hangs from them for about 10 seconds.  The scene was allegedly called the “Harold
Lloyd tower theme” in pre-production stills. HLE alleged that numerous
consumers were expressly and explicitly deceived and confused into believing
that Moment’s products and/or services were affiliated with Harold Lloyd and
HLE.
Moment argued that there couldn’t be substantial similarity
between Safety Last, a 73-minute film,
and the Time Tower video, because of the small amount of time where similarity
existed.  But the court found obvious
similarities in the two scenes, and that was enough to avoid a motion to
dismiss, because if what has been copied is qualitatively important, a fact
finder can find substantial similarity and HLE alleged that the scene at issue
was “one of the most iconic” images in cinema.  Fair use also couldn’t be resolved on a motion
to dismiss, including questions of transformativeness and market  harm.
However, false designation of origin/false endorsement
claims failed because of Rogers.  (Or Dastar?The Time Tower video was an expressive work;
the use of Lloyd and the alleged clock scene “trademark” had at least some
artistic relevance, since the scene was “a tribute to the silent era.” Any
reference to “one of the most iconic images in cinema” was artistically
relevant to a tribute to silent movies.
And there was nothing explicitly misleading about the
use.  HLE argued that the Time Tower
video and the website including pre-production stills referring to the scene at
issue as the “Harold Lloyd tower theme” were misleading.  But neither had any explicitly misleading content. There was no direct reference to
Lloyd, and use of a mark alone isn’t explicity misleading; to hold otherwise
would render Rogers a nullity.

This result also doomed the UCL and common law unfair
competition claims.

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Marketing method and display are functional, nondistinctive trade dress

AMID, Inc. v. Medic Alert Found. U.S. Inc., No. H-16-1137
(S.D. Tex. Mar. 16, 2017)
American Medical ID (AMID) sued MedicAlert Foundation United
States for trade dress and copyright infringement. The parties compete in the
market for medical-identification jewelry. One of their marketing techniques is
sending unsolicited mass-mailed countertop displays with tear-off pads attached
to doctors’ offices. “Both companies include a letter to each doctor’s office
explaining what to do with the enclosed display and the importance of patients
wearing medical-identification jewelry.” 
I’m just going to pretend that the court said that AMID “registered its
copyright” in its letter.  There, that
feels better.  AMID also claimed that
unsolicited mailing of countertop easel displays was a protected marketing
method and that its countertop display was protected as trade dress that
MedicAlert infringed
It all started when a former AMID marketing manager, Justin
Noland, resigned from AMID and went to work at MedicAlert. MedicAlert hadn’t
mailed unsolicited countertop displays to doctors’ offices for the previous six
years, but resumed the mailings after Noland began working there.  
In July 2015, AMID complained to MedicAlert that Noland had
violated his noncompete agreement with and confidentiality obligations to AMID,
and that MedicAlert had made a “virtual carbon copy” of AMID’s display.  In August, MedicAlert responded that it
wouldn’t fire Noland because the noncompete clause had already expired, and noted
that MedicAlert would “remain mindful of all the operating boundaries
concerning marketing materials between our two companies . . . .” MedicAlert didn’t
agree to recall, stop using, or change the MedicAlert marketing displays or
other marketing materials.  AMID
responded in early September, mostly proposing a marketing partnership.  AMID sued in April 2016, making nearly 11
months between when AMID allegedly first saw the MedicAlert displays on the
MedicAlert website and when it sued.  The
court denied a preliminary injunction, despite finding a likelihood of success
on the merits of the copyright claim.
The display method/display itself were not registered.  AMID claimed they were inherently
distinctive.  Abercrombie doesn’t work well for non-word marks.  We know more about what can’t be inherently
distinctive—color, product design—than what can.  Erring on the side of caution, as instructed
by Wal-Mart, the court here found the
claimed trade dress to be on the “product design” side, rather than product
packaging, thereby requiring secondary meaning.
AMID proposed a number of different versions of its claimed
trade dress.  After the PI hearing, AMID
alleged rights in a “Marketing Plan and Scheme” that included:
a.         unsolicited
mass-mailing to doctor and other professional offices of display;
b.         an
easel display with integral order forms;
c.         real
jewelry facsimiles in the upper portion of the display;
d.         an
introductory letter;
e.         a
see-through cardboard cover over the jewelry with one medal visible; and
f.          a
clear mailing wrapper.
It also alleged rights in the “[p]ackaging as received by
the professional office of the mailed [d]isplay,” and the “display as used in
the professional offices,” specifically:
a.         an
easel display having three panels on the front portion of the display;
b.         a
top panel, followed by a larger central panel with real jewelry facsimiles
followed by an order form on the lower portion of the display; and
c.         an
order form pad below the central panel taking up approximately 2/3 of the
display face with photographs of jewelry on the face of the order form.
 

AMID package

AMID display at Publix

display comparison

MedicAlert package

As the court noted, one cannot “coherently define exactly
what the trade dress consists of and determine whether that trade dress is
valid and if what the accused is doing is an infringement” until after the claimant
submits the “discrete elements” making up the its claimed trade dress. AMID’s
final version included for the first time “the proportion of space taken up by
the order form pad, photographs of jewelry, and the number, position, and size
of the panels.”  The court commented that
it wasn’t clear at what point changing the definition of the claimed trade
dress would require an amended complaint. 
Without precise boundaries, determining infringement—and determining
what a competitor could and couldn’t do without entering a courtroom—is very difficult.  The court referred to Wal-Mart’s instructions “to be cautious about applying vague,
litigation-friendly tests for inherent distinctiveness,” and noted that AMID
has changed its marketing materials over the years, helping to create a “moving
target.” 
AMID’s witness claimed that all the variations shared a
“family look,” but her testimony about what meant “was elastic and expansive.” She
claimed that 80 percent of the displays distributed since 2012 had this “family
look.” The court wasn’t clear which the other 20% were.  AMID used “displays with clearly different
shapes, sizes, text size and font, color, artwork, layout, and materials,” and
some didn’t contain any of the elements AMID identified as defining its trade
dress. Thus, AMID failed to define its trade dress with sufficient clarity or
consistency. 
Plus, erring on the side of caution as instructed, the court
classified this ambiguous trade dress as product design, requiring secondary
meaning for protection.  AMID argued that
its trade dress was “akin” to product packaging, but AMID’s products are
bracelets or dog tags and the purported trade dress didn’t “package” the actual
jewelry AMID sells.  It was in the middle
of the packaging and design spectrum.
AMID also failed to show secondary meaning.  Four of the claimed seven trade-dress
elements were packaging designed to be removed by a doctor’s staff before
putting it out for potential buyers (or doctors) to see.  AMID argued that these elements were seen by the
“gatekeepers”—the staff in the medical office who make the decision to place
the display on a counter visible to the “end users,” the patients.  The court commented that “[i]t stretches
current law to analyze [gatekeeper staff] as the relevant consumer in the
secondary-meaning inquiry.” Doctors might also be gatekeepers in deciding
whether to place the display in their waiting room or whether to recommend
medical-identification jewelry.  Ultimately, gatekeeper recognition couldn’t
determine secondary meaning, because gatekeepers weren’t consumers of medical-information jewelry. “The parties have not
cited cases in which a court found protectable trade dress, when, as here, most
of the purported trade-dress elements are never seen by members of the buying
public.”
Plus, the secondary meaning evidence was lacking as to
consumers, especially given the many variations in displays AMID had used over
the years.  MedicAlert put on a consumer
survey finding negative secondary meaning—that is, 35.3% of the test group and
39.8% of the control group associated the two displays they saw with one
company.  In the test group, 3.2%
identified MedicAlert as the source of the display they saw, while 5.4% of the
control group did.  Similar results
obtained for a test of whether “Medical IDs Save Lives!” had attained secondary
meaning.  AMID’s criticisms of the survey
were unavailing, especially given that the survey properly targeted people
who’d bought/were likely to buy medical identification jewelry.
Another survey found that 23.3% of the doctor-respondents
currently displayed advertising or promotional literature from both AMID and
MedicAlert; 58.5% didn’t currently display either; and the remainder were
roughly split.  There was no evidence
from this survey that either party’s marketing materials were replacing the
other’s.
Annoyingly, the court quoted the line that “evidence of
intentional copying shows the strong secondary meaning of [a product] because
‘there is no logical reason for the precise copying save an attempt to realize
upon a secondary meaning that is in existence,’” right before it started in on
functionality (which it found here).  But
still, there was circumstantial evidence of intent to copy given Nolan’s
employment and the resumption of mass mailings. 
(The court did say that intent to copy was more relevant to infringement
than to protectability in the first instance.)
Finally, the trade dress was functional and AMID didn’t meet
its burden to show nonfunctionality. 
Under the first TrafFix test,
a feature is functional when it “is essential to the use or purpose of the
article or if it affects the cost or quality of an article,” and it’s essential
“if it serves any significant function other than to distinguish a firm’s goods
or identify their source.” If the feature is functional under this definition,
there is no need to consider competitive alternatives.
Evidence of functionality included that displays using an
easel design and attached pad with tear-off sheets are covered by utility
patents and are commonly used. Attaching sample products to countertop displays
was also commonplace, and attached samples had to be placed so as not to make
the display fall over. The combination of functional features wasn’t configured
in a nonarbitrary manner.
And finally: there was no showing of irreparable harm, given
AMID’s delay in seeking relief even after calling the display “an extreme
knockoff” and expressing “great concerns about the use of those [displays] in
the marketplace.”  AMID’s 2015
correspondence didn’t demand that MedicAlert stop distributing the displays or
remove the display from its website.
The copyright infringement claim fared better.  The transmittal letter that introduces a
healthcare professional to AMID’s marketing materials is “the first thing a
healthcare professional sees on opening the display package.”  The court found “obvious” similarities,
including virtually identical text at the bottom as well as overall look and
other content.
 

AMID letter

MedicAlert letter

“While MedicAlert had a long history of using displays in
its marketing campaigns up to 2009, MedicAlert has presented no evidence that
it used a letter until the mailings sent after Noland arrived.”  However, there was still no irreparable harm,
given AMID’s delay and MedicAlert’s cessation of its use of the similar letter.

The court declined to dismiss a common-law
unfair-competition claim based on misappropriation of “valuable business
methods, marketing plans, confidential know-how and proprietary information,” not
rising to the level of trade secrets.

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