WIPIP concurrent 3 (most of it)

Annemarie Bridy, Fearless Girl Meets Charging Bull:
Copyright and the Regulation of Intertextuality
DiModica (who made Charging Bull) complained that Fearless
Girl’s placement created an unauthorized derivative work and violated VARA by
being a material alteration that prejudiced his honor—Charging Bull was no
longer optimistic but transformed into a threat. Turning a semiotic dispute
into a legal one.
Can © be leveraged to prevent confrontational dialogue
w/preexisting works? What role does copyright play in regulating text to text and
author to author interactions? And what can literary theory tell us?
Existing scholarship on role of romantic author: presupposes/valorizes
creative genius and possessive individualism. But US © has important
differences from European law. Bahktin/Gerard Genette: intertextuality views
works relationally rather than as closed systems—dialogism within & between
texts. Monologic discourse is poetic; dialogic discourse is associated w/the
novel. Monologism privileges unitary voice of author as autonomous; dialogue
has mix of voices that are layered in the work. Work is more open and porous.
Genette’s hypertextuality: secondary author targets preexisting text &
rewrites & completes it in a way original author might not have liked—hypertext
as unfaithful continuation of its hypotext.
Dimoda embraces aesthetic monologism, which is encoded in
author centric European © law. Strong moral rights, limited
exceptions/limitations. US © is hospitable to intertextuality by design, even
assumes it. Less author-centric and more focused on public interest in
production of creative works. © protects second degree works such as
compilations and derivative work, and also excepts a range of second degree
uses, including fair use which is flexible/unfaithful/murderous (Genette’s
term) and also compulsory license for musical work covers (less flexible but appreciates
artistic impulse to remake/reengage the work). Very narrow moral rights that
delayed US accession to Berne.
He can’t prevail: derivative work claim requires physical
incorporation of elements of the protected work [but consider the case from
yesterday finding that embedding was infringement]. Not every modification of a
work creates a derivative work, Mass MOCA, and altering the viewer’s experience
of a work doesn’t create a derivative work, Lewis Galoob v. Nintendo. Even if
the placement did result in a derivative work, the semiotically confrontational
nature of its relationship to Charging Bull would mean that it’s a fair use.
Rosenblatt: maybe if juxtaposition is fair use, the fact it’s
juxtaposition forces us to go straight to fair use & concedes it’s w/in the
scope of the right.
A: but physical incorporation is still necessary.
Ann Bartow, The Economics of Race and Gender in Art Law
Ownership disputes w/racial subtext. Control of Barnes
Foundation stolen from Lincoln University, a HBU in Pa.; art now controlled by
wealthy mostly white people in Philadelphia—thought the art should be in the
hands of nice white guys. Georgia O’Keefe donated art to Fisk Univ., an HBU in
Nashville; art now 50% owned and controlled by museum in Bentonville, Ark. founded
by Walmart heiress. Leveraged highly contestable claims of financial
mismanagement/lack of sophistication.
Georgia O’Keefe lost art theft based on statute of
limitation grounds; in the vast majority of art theft cases, by contrast,
courts found all kinds of ways around SoLs: possession as continuing crime;
demand and refusal rules before SoL restarts; sales reboot the SoL; etc. Nude
posing as a career strategy for O’Keefe—it was one of the only ways she could
be accepted in the arts community. She didn’t feel it was voluntary. Hazards: sexual
harassment, sexual assault, nonconsensual pornography, low pay and labor
abuses, gawkers & creeps.
Another example: Barbara Kruger: appropriation art; Hoepker
was the foreigner who didn’t comply with 104(a) so wasn’t able to enforce his
restored (c). She might not have prevailed on fair use; museum used the art as
an ad for the Kruger show, and put it on mugs and the like—she was exploited as
she was being accused of exploitation.
Prince and Cariou’s Yes Rasta: both whites dealing in
pictures of bodies of black men (and white women from soft-core porn for
More women than men attend & graduate from art
schools/get art degrees. There’s no movement to get more men in art as women in
STEM; but men are at the top. Every artist in the top 100 sales in 2013 were
men. In 2014, no women in top 2104. Less than 4% of artists in Modern Art at
the Met are women, but 76% of the nudes are female. Don’t do as well at art fairs;
held only 24% of museum director positions and were underpaid compared to men. Art
galleries control value of art by manipulating two signals: price and who buys.
Too low and the perception is low quality and too high and the artists seem
overhyped. Manipulate the secondary market. Also try to sell to tastemakers. Control
value of art worldwide, b/c value is subjective and subject to signalling;
white men decide what’s good and valuable. Museums can make or break artists
with shows, deaccessioning, etc. Often in collusion with galleries, auction
houses and wealthy collectors. China has wealthy collectors in old, European
art which has also had an impact.
Antidiscrimination as a moral right. Attribution can
facilitate discrimination, esp. for gender. Artworks can be racialized or
gendered in ways that are perceptible and signaling, as w/software that can discern
gender of text authors. Integrity: has multiple meanings, including the quality
of being sound moral principle, uprightness, honesty and sincerity. Galleries,
auction houses and museums as sites of resistance and reform.
Q: Internal splits in Fisk and Barnes led to majorities to
surrender [Bartow notes that they required board takeovers] and there were
reasons to see them not as central to the missions of the school. When the
institution did try to monetize the collection, the AG limited Fisk’s ability
to do so—it was accomplished in a number of different ways, including by using
institutional power to threaten [Bartow notes threat to funding]. The capacity
to divest the collection once the decision was made was also limited &
cabined. [Sounds to me like the expropriation of black wealth or wealth
foundation described in Richard Rosenstein’s and Ta-Nehisi Coates’ recent
Rosenblatt: Compare appropriation art. Some are seen as
legit and others aren’t. But when I dig in to these problems, they feel more
like antitrust problems than IP problems. Why is IP the lever here?
A: there could be other things. And antitrust has a role to
play around auctions. But moral rights is more empowering to individual
artists. [CRT’s rights claims.]
Q: what if art is a male display behavior of taking attention-grabbing
risks making a biological basis for male dominance in the field?
Chien: Uber pays men more than women per hour, but it seems
to be b/c men drive faster and more dangerous routes. Correlated w/things that
are correlated w/value. Are there ways to quantify what would be the legitimate
basis for one thing to be displayed more? What are the right criteria?
Raymond Ku, The First Amendment Implications of Copyright’s
Double Standards: It’s More than Just Entertainment
Touting the value of P2P for distributing creativity/access w/o
deadweight loss. Reaction of former Register: what’s the big deal? It’s just
entertainment.  Debate b/t Justices
Stevens & Blackmun about ability to time shift popular entertainment: who
cares about Honey Boo Boo?  Stevens
struggled to find a political or educational use.  Sony makes more sense when you connect it to
Bleistein: why are we judging the value of the programming that’s being watched? 
But we judge that all the time. We’ve been discussing how
much creativity is sufficient for © protection and fair use.  When we do this, entertainment essentially
always loses.  SAT/Seinfeld Aptitude Test
case is the key example.  Interesting
doctrine: Protection of creative facts—less need to copy them.  In Hoehling, by contrast, the movie studio didn’t
need to justify its copying of Hoehling’s theory.  Case law suggests that for fair use, when we’re
dealing with entertainment, for fair use no amount of added creativity is
sufficient—Blurred Lines, 60 Years Later, The Harry Potter Lexicon. Even in
Cariou v. Prince, court goes out of its way to say that its broad definition of
transformativeness doesn’t cover entertainment.
We’re mixing up the idea of results and repetition. With
factual works we do want people to reach the same results hopefully.  With fanciful works, the options are infinite
and reaching the same result is not inevitable; repetition of results means
repetition of expression. Independent contributions are not repetition. [  For factual and fanciful works,
repetition is part of the process for learning for both; researching and
performing respectively are similar in their contributions to understanding.
Retyping Holmes’ common law is meaningless, but a musician that is able to
replay or emulate Yo-Yo Ma or paint in Van Gogh’s style is doing something
dramatically different, yet we say that copying in the latter circumstance is
less justified. For both fanciful and factual, incremental contributions may
not be recognized or appreciated as such; also, someone may say it better.
Factual: financial stakes are small in litigation, while for
fanciful works the stakes can be significant. 
For fanciful works in litigations, the work speaks for itself and
everyone’s an expert; there are no standards/informal voluntary standards. Factual
works litigation: there’s a practice of framing for the jury, governed by
agreed on standards and guidelines (my article tells you the contribution it’s
making; general, disciplinary, and institutional standards) whereas Fearless Girl
and Charging Bull stand by themselves; courts may defer to professional/expert
RT: about results, what do you mean? I would have gone the other way, w/TS Eliot’s objective correlative—similar results can be achieved by multiple different expressions (compare romance novels or really any standardized genre, even the middle aged white male adultery novel).
A: When you’re trying to answer a Q, 2+2 has one answer but
literary Qs have multiple answers. [Like Barton Beebe on progress & Jeanne Fromer on problem finding.]
Rosenblatt: is this a problem of fictional works versus a
problem of ignoring SCt precedent in the form of Campbell’s dictate to consider
different meaning or message, not just purpose? Are courts ignoring this b/c
they disagree & think that entertainment is frivolous?
A: Easterbrook says he likes Cariou but it doesn’t explain
difference b/t me creating a derivative work and me making a fair use,
especially in entertainment where we often think it’s something the original
author should control. 

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WIPIP Concurrent 2

Nancy Kim, The License v. Sale Puzzle after Impressions v.
Sales exhaust the patentee’s rights to any item regardless
of what the contract says. But restrictions on licensees are different because a
license doesn’t implicate the same concerns about restraints on alienation as a
sale.  Even if the contract is
enforceable, that doesn’t mean that the parties can’t contract about everything.
They can’t recharacterize the world—you can call a contract w/a worker an
independent contract, but if the facts establish an employment relationship you
have an employee.  Same with
license/sale.  “Authorized” sale is also
Contract can give rise for breach and infringement claims,
but not for the same provision; not every breach exceeds the scope of the license
and constitutes infringement. Principles: if the first transaction by the
patentee is a sale, all subsequent transactions are sales. License agreement
may or many not be followed by sale. If license allows licensee to sell patent
items w/o restrictions, then the subsequent transactions to customers are sale.  If license imposes restrictive conditions on
licensees’ ability to sell, they’re sales only if the licensee required with
those conditions—e.g., limited to sales in North America, and then sales in
France are unauthorized.  If licensee has
obligation to impose restrictions on customers, then subsequent transactions
are sales.  If mfgr didn’t have customer
sign contract restricting use, mfgr might be in breach of contract, but it’s
still a sale. 
With a standard form contract/adhesion contract if the patentee/©
owner retains rights to reposess or control item, it should be considered a
license, but otherwise a sale.  If
negotiated or individual contract, distinction should depend on whether
contract limits one of the patentee/© owner’s exclusive rights (that is, does
it affect the scope of the license?).
Whether the purchaser/licensee infringed depends on whether
the contractual provision was a covenant or condition, which means did it limit
the scope of the license/implicate one of the exclusive rights of patentee/©
owner, but the ©/patent cases differ. 
Sale of © item may be treated as still having a license.  Example: a nonexclusive, nontransferable
license to make 2 copies. This is not conditional language; transferability is not
one of licensor’s exclusive rights as a © owner.  Also: Licensee agrees not to transfer, assign
or sell—that’s still drafted as a covenant not a condition.  “provided that licensee may not transfer,
assign, or sell … license is expressly conditioned upon compliance w/this
provision”: if result would be forfeiture, courts in contract law generally are
disinclined to find a condition.  How
about: if licensee attempts to transfer, assign or sell this software, the
license immediately terminates and is void: clearly a condition, and that’s
what it should take.
Lemley: How confident are we that 9th Circuit’s
condition/covenant distinction survives Lexmark?  Lexmark suggests © and patent are kin. 
A: she’s concerned about that.  Ct doesn’t directly address license v. sale
b/c they say it’s a sale. Also different exclusive rights: with ©, you can sell
the product and still not exhaust all the rights (e.g. public performance).
David Olson, Why Increasing IP Exhaustion Leads to
Decreasing Ownership of Goods
Information costs for servitudes on chattel property are
high; recording burden is high; may restrict resale/reuse of goods forcing
inefficient manufacture of new goods instead. 
With information goods/internet age cost of checking restrictions can be
very low relative to value of item.  IOT
goods that phone home/alert you as to any restrictions.  Cost of knowing them is just lower [depending
on what you mean by “knowledge” given human practices & functional capacities].  Digital copy of book can also be created more
cheaply; not much waste in idling/deleting my copy.  Allows for price discrimination, as does
monitoring via IOT/collection of $ for downstream uses.

Still, most goods are sold free/unconstrained. 
It’s often more profitable to simply make a first sale w/o monitoring or
transaction costs.  E.g., cars.  Other times it can help buyers who can’t
afford the total cost to give them only a partial right & have owner retain
residual value—rental cars, tuxedos, etc. 
For the IOT, your refrigerator can be shut down if you
violate a term.  HP is also licensing/renting
printers on this basis—rent charged based on amount of use, and they send you
the toner as you need it.  The
relationship no longer looks like a sale; it is ongoing and involves patches,
etc.  If your credit card expires, the
printer stops working.  Pretty effective
lockup through contract, and enforcement w/o any privity of contract necessary.  [Pretty good opportunities for fraud?]
Is this good/bad and how if at all should the law
respond?  B/c price discrimination can be
quite valuable to society, especially for cheap goods, the next move to
preserve ownership would have to be inroads into contract law to stop these
characterizations/prevent these restrictions being enforced via self-help.
Reasons to be cautious about making that move: now that exhaustion
is so strong, we’ll see the same attempts through contract law; we’d be better
off to allow experimentation and see how the market reacts. We’ve never seen
mfgr limit all use/control all aspects; it’s not profitable and there’s bad PR
from people not liking price discrim. Instead we’ll see monitoring and price
discrim w/customization for users’ needs. 
Consumer will not be able to see she’s being charged differently b/c the
good will not be exactly the same for each one. 
Like cars with different packages [this is a really disturbing example—we
know that the poor/women/minorities pay more]. 
Can charge people willing to pay more, more, and charge low prices to
those who can’t afford more b/c arbitrage will be impossible.  [When has this ever happened, compared to
poor paying more?]
Better to use antitrust law than sale/license law to deal
w/abuses such as market foreclosure.
RT: questions above. 
Tell me why you’re hopeful.
A: discrimination law would still apply, but he was talking
about standard packages; discrimination comes in at the overall price of the
car.  People could still create data
[unless contractually prohibited]; they might find that women are willing to
pay more, which could be a problem.  Women
sometimes are never offered a low enough price and they walk away; the
transaction fails.  AI, which has the
potential to lessen discrimination [do we know that?], means that if your goal
is profit maximization you will try to figure out what people will pay and get
past proxies like age and race.  [That does
not seem to me to describe how the current algorithms work—they absolutely use
your categories to be predictive about your characteristics, including WTP. Plus
your other non-race and gender characteristics are tightly correlated w/them,
so “non proxies” (e.g., where you live, whether you’ve gone to jail, how much
money you make) are also proxies.  And
then your reaction to the offers you get—which people in other groups won’t get—determines
what happens next, so the discrimination just gets baked further in.]
Rosenblatt: rich could be allowed to make remix, poor not.  If what people want to do is on-label, then
your logic makes sense. But if they want to do off-label stuff like remix,
reverse engineering, follow-on innovation, doesn’t this bar that?
A: if we restrict producers to one price, the Q is do poorer
consumers get to buy anything, or nothing?
Michael Burstein, Indiscrete Property
Information is often incompatible with the notion of
thingness in ways that go beyond the mere costs of defining the thing: it is
indiscrete and continuous, as opposed to discrete and separable as most
tangible goods are. While a stock tip is relatively discrete, more often info
conveys different value to different actors; info is more of a platform on
which transactions occur.  Thus value
depends less on definition than the structure of the underlying institution.  Should focus on rules that allow people to
structure info flows for best use.
Case for info as discrete property, from two parallel
movements suggesting strong IP to economize on use of info.  First, incentive/reward theory is
unsatisfying; market failure resulting in underproduction doesn’t dictate IP as
solution and other solutions could produce incentive w/less cost.  As empirical matter, it’s well understood
that in many situations the IP incentive, or any incentive, may not be
necessary for production of intellectual goods. 
Next move: commercialization theory, where IP is about the subsequent
use of creation/invention by giving incentive to solve market failure
structurally similar to the earlier market failure theory, or by serving as
beacon/signal/contracting device for people to come together and exchange info.
New private law is aimed at reclaiming centrality of tort/contract/property in
US law. Scholars offer info cost theory about economizing the cost of info
specifying use rights.  Thingness of property
matters b/c by defining a thing and marking it w/rough exclusion signals we
create relatively clear signals about what you can and can’t do with it. Use rights
in a car; you need no info about underlying owner of car to know not to steal
it.  You just need to know it’s not your
Nonrivalrous info: inputs to info use are rivalrous, so we
want to manage them. New public law theorists like Henry Smith argue here’s a
benefit from reducing complexity of coordination, if the thing can be defined
easily and the uses cannot.  In such
cases, exclusion strategy is more economically justified than governance. Smith
argues that patent is more thing-y than ©. This is not uncontroversial or unproblematic.
Clarisa Long has made the exact opposite argument.
Problem: relies on thin concept of info such that all you
need to worry about in defining a good is the cost of delineating the good. But other characteristics make it
almost incoherent to talk about definition. Info is additive, communicative,
and layered.  Additive: info bits build
on one another so value is different depending on type or info.  “Data information knowledge wisdom”
framework: data is info asset that’s product of observation, relatively
discrete and objective; info is relevant or usable or significant—info uses
data to answer a Q; knowledge is usually knowhow, turning info into instructions/decisionmaking
aids, synthesizes across types of info.  Literature
usually ignores wisdom and so will I.  As
you move up, increasing correlation w/social meaning and value.  Info has value, but it exists in different
forms w/different sources of meaning and value.
Communicative: JP Barlow: information is a verb, not a
noun.  To have an effect in the world it
must be transmitted & create meaning for recipient.  Does this not through ethereal transmission,
but is contained in artifacts—physical manifestations that are vessels for the
info. Some artifacts are more self-revealing of the info than others.  Sometimes info can be sticky/tacit (Eric von
Hippel) and needs more than writing down. Info can be modulated
self-consciously, as w/software modularity so you can hide certain elements of
code & reveal others.
Layered: Heterogeneity—small molecule pharma—most direct way
to communicate info is to show its structure, but you could also talk about the
molecule/generate info about that.  You could
talk about chemical characteristics, biological effects, efficacy &
toxicity, all w/o revealing its structure.
Info exists in continuous indiscrete state in many cases.
In land, things are rough signals of value. But if info is
continuous then thingness may send wrong signals.  Lose out on ability to communicate across
users.  May be over and
underinclusive.  Answer to Smith’s
question about how you specify rights & duties up front may be “you don’t
have to.”  Spectrum of discreteness may also
help rationalize our intuitions, e.g. about patentable subject matter. If
abstract idea is relatively indiscrete, and open platform approach is most
efficient, that may help explain why IP doesn’t protect them. Likewise for
doctrines about timing of patentability such as utility/reduction to practice—when
the info becomes more discrete.
Rebecca Kai-Fang Lin, Artist’s Resale Right: Past, Present
and Future
What makes art so special? 
Work of art can be one of a kind; reproduction doesn’t create the same
thing.  Low price when first sold.  Resale right was exception to exhaustion
introduced in France.  Visual artists
usually earn less than average income; this allows recognition and fair
treatment and also helps them stay connected to the works.  Also can support cost of storage,
conservation and restoration.  No
evidence that resale right harms the art market.
Berne Convention introduced resale right in 1971 as reciprocal
right based on country of artists. 
Rightholder is author/authorized person. 
Covers original works of art/original manuscripts of writers and composers.  Nature: inalienable right; applies in any
resale.  Collecting societies should be
able to collect the royalty and should have a right to gain information.  US, China, France and UK are the main fine
art markets now, representing about ½ of global sales.
EU has harmonized: rightholder/authorized person though
member states can limit who those can be; liable person is generally the seller
but member states can diverge; the covered works are original works of graphic
or plastic art; must be physical but copies can be included.  Nonassignable and inalienable right; applies
in resales unless b/t private people or acting for nonprofit museum.  Sliding rate by sales price. Its share of the
art market grew over the past years. 
France: liable person is acquirer & law officials
jointly; applicable sales are those via a public auction or dealer.  Uniform 3% rate, and artists must publish in
Official Journal if they want the right. 
UK: seller and relevant person jointly & severally liable; copy of
work is generally excluded; collecting society and right to information exists;
sliding rate based on sale price. 55% of dealers not affected; average
processing time of 10 min. 81% of artists use the income to pay for living
In US, only California—royalties of 5% of sale price, held
to violate dormant commerce clause.  Japan
lacks resale right.  Potential artist
benefit would be big on market of EUR 2.19 billion; 280,000 visual artists
could be covered; manga should also be included.  China has no resale right—proposal to cover
limited to auction sales and limited to increase in value.  Int’l treaty may be a good idea.
RT: Collecting societies have a bad reputation for not distributing
money fairly especially where the uses are varying and the market is thin (i.e.
especially outside music).  If you
require registration, what’s the point of a collecting society?
A: Tracking use is a big problem with other collecting
societies but discrete sales of physical objects are more identifiable, and
collecting societies can handle the administrative costs more easily than
individual artists.
Q: Why would we want to benefit successful artists and not
unsuccessful ones, when resale rights are only valuable to a very few?
A: mitigating inequality.
Chiang: What is the problem you’re trying to solve? It’s not
free riding.
A: musicians can make lots of money from sales of copies,
but visual artists can’t, especially for works sold early in their
lifetimes.  Sellers benefit from the
subsequent creations of the artists so artists should also benefit.  Unfair.

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WIPIP panel one: TM tarnishment and (c)

[title fixed because I can’t keep seasons straight]

Suneal Bedi, Bad Brands: Experimental Studies in Trademark
What is the reputation of a mark?  Working on PhD in marketing at Penn;
marketing is the best discipline to answer this Q.  Brand associations and attitudes are the
reputation of a mark. TM isn’t just source indicator; it invokes nodes of
meaning.  Attitudes= liking;
associations= other meaning, like “Mexican” for Chipotle. Thinks that
tarnishing should have to affect preferences/attitudes—should move Chipotle
down in the ranked preferences/affect market share. So why not look just at
sales? The statute is focused on reputation, which is distinct from decreased
sales though it should predict such decreases. There can be instances of
reputation harm w/o harm to sales.  WIP
looks at isolating decreased sales; have to use sophisticated quantitative
What predicts tarnishment? 1. Multiple exposures.  At minimal exposure, people don’t really
care. It’s an S shaped curve: middle exposure is high effectiveness; after that
there’s a saturation point, which is why it doesn’t matter for Pepsi to
advertise at the Super Bowl.  Tarnishment
is competitive advertisement harming the senior mark. But only awareness &
internalization of associations can do harm. 
A few exposures or one won’t affect reputation.  Empirical strategy: multiple exposures.
2. High cognitive load. 
Elaboration likelihood model predicts attitude change in 2 different
ways: (1) central (rational and thoughtful); (2) peripheral (positive or
negative cues, simple inferences). People use peripheral processing in times of
high cognitive load.  A double-take: your
mind is somewhere else, but as soon as you look close you aren’t really
confused. That’s an instance of high cognitive load, and that may predict
Studies include pre-tested brand associations and attitudes
for several brands. Chick Fil A; fictional tarnishing brand, Chicks Fill A
gentleman’s club.  People prefer Chick
Fil A lower after exposure and find it to be less wholesome.  It makes it a little different but not a lot;
not on tastiness or liking at all. What happens about multiple exposures?  Embedded banner ads in news articles; asked
people to tell them about the news article—high cognitive load.  Zero ads v. 4 ads: Then there was an effect
on rank, tastiness, and liking.
[This is all an argument about the nonrational, nonfactual,
non-thought based nature of tarnishment which under current 1A doctrine should
put it off limits for the law, just as in the tobacco cases.]
Felix Wu: what implications for tarnishment cases?
A: courts aren’t using the right empirical evidence, or
requiring the right empirical evidence. Both under and overinclusive—actual
harm is underinclusive, but 6th Circuit’s presumptive harm is
overinclusive.  If it exists narrowly, Ps
must introduce good empirical evidence.
Lunney: The Streisand effect—most such uses you’d never hear
of except for the litigation.  Debbie
Does Dallas, Pillsbury Doughboy. 
A: The distribution of awareness—how many people see it;
also of the people seeing it, how many times they see it.  Both matter. 
People who saw the movie saw her once in the costume, according to
Lunney.  He says that it’s not therefore
likely to be tarnishing.
Q: what about the ridicule factor? It doesn’t necessarily
matter what the “tarnishing” is but just the challenge, mockery.
A: but how do we know it’s a mockery? Only if it’s
associated with something perverse. 
[Wacky Packages]
Lunney: is it ok to garrote the demand for something through
criticism, a la Campbell v. Acuff Rose?
A: Wal-Qaeda: Jacoby’s survey says there was tarnishment;
but overriding concerns like free speech matter.   Neutral on whether this is a good idea
(thinks it’s kind of dumb).  He’s ok with
tarnishment not being something the law regulates—the point of this was to
discuss the standard of proving tarnishment now, which is bad.
RT: Charts show 8 ad spike/recovery in ratings. 
A: he thinks it’s a demand effect b/c respondents started to
say “I think you were trying to get me to like Chick Fil A more” when he asked
them what they thought the survey was trying to prove when there were 8 ads. [This seems worth further investigation]
McKenna: what makes us think that consumers’ reactions have
anything to do w/the fact that it’s ads and not other things that might produce
exactly the same effect. [I noted that Victor’s Secret image he used was from
the Simpsons, not the actual Victor’s Secret shop.]  If there’s nothing unique about what the law
targets, it’s cherrypicking from the same activities.
A: what’s unique is that the point of using it is to draw
attention to the junior mark specifically people because people are aware of
it.  Criticism = not using Wal-Qaeda to
draw attention/coopt.
McKenna: now you’re just talking about free riding.
A: yep.  That’s the
actual harm of dilution/tarnishment.
Charles Duan, Implications of Oracle v. Google for Technical
Is it an infringement to implement someone else’s interface?
Most standardss come from private standard setting organizations that invite
participants from multiple groups who propose ideas and then the SSO chooses
for standardization. Ideas contributed by 3d parties.  Patentable inventions?  SSOs have very comprehensive patent policies
trying to prevent patent claiming. But fewer have copyright policies.  W3C’s policy changed in 2015, but Oracle v.
Google was 2014—may have been a response to that decision. Confirms his belief
that programmers didn’t think APIs and standards were ©able. Should courts
accommodate industry expectations? 
There’s value to that, though the law is not bound to follow experts in
the field.
SSOs as a practical matter may want to start adopting ©
licensing policies.  Standard-setting
organizations like IEEE might want to be more involved in these discussions in
©, though members may have conflicting incentives.
Q: what about ASTM—software standards varying from other
types of standards?
A: distinctions—gov’t mandate in ASTM case. That was copying
the standards text and not implementing the standard—as if ASTM were
challenging buildings made using their standards.
Carys Craig, Substantial Transformative Taking: Holistic
Comparison and the Non-Infringing ‘New Work’
Bakhtin’s idea of dialogue: what an utterance chain looks
like from a dialogic perspective and how that should influence ©.  Utterance as work: four connected things:
what has been said before, the already spoken (relational meaning); distal not
yet spoken (the still to be said;) the proximal not yet spoken (anticipated
response); distal already-spoken (broader cultural meaning). So how can ©
protect the already spoken while permitting the dialogic utterance in the chain
and leaving room for the not yet said?
What is a copy?  Analysis
at the moment of prima facie infringement at which you determine something is
substantially similar. Canadian case: Cinar Corp. v. Robinson: pitch and pinch:
someone pitches a story about a film, which is then made into another
film.  Claude Robinson had spent years
building materials for Adventures of Robinson Curiousité; then he saw it on TV anyway w/parallel characters,
settings, scenes throughout.  On appeal, Cinar
argued that court was wrong to compare the works without filtering out the
unprotectable elements.  Altai abstraction
filtration comparison test: Canadian SCt said it wasn’t appropriate for this
type of work which has to be compared holistically.  Shouldn’t dissect work, which eviscerates it—hard
to get a sense of the authorial contribution. 
Comparison, abstraction, filtration, then compare again if necessary.  Criticized for undue focus on protecting
author over downstream creators, influenced by very sympathetic facts.
Maybe we need to look at whether the defendant’s work is in
its whole something new—new expression. Holistic comparison can be used to
shift to asking about the dialogic relation b/t the texts and to see the D as a
possible creator too. Could consider transformativeness of the taking into our
assessment of substantial similarity, rather than waiting for fair use and fair
dealing.  By the time you’re searching
for an affirmative defense, you’re already on the wrong side of copyright’s
moral equation—seeking a reprieve by calling yourself an author too. We could
do this at the infringement stage instead. 
From Canadian perspective: transformative use isn’t actually available
as a defense, but we could put it in infringement. 
Example: Larrikin Music Pub’g v. EMI Songs Australia (Down
Under/Kookaburra song)—line taken from common folk song and reproduced in hit;
court could find no way to avoid conclusion that substantial part of the song
had been taken, and there was no defense. Holistic consideration could find a
new work even w/some copying of the “golden nugget.”  Substantial transformative taking should be
regarded as an original work—not derivative but responsive, new utterance in
the chain in a discursive struggle w/P’s already spoken work.
A: not that surprised—old English fair use cases were about
new works being created; not framed as a defense at all.
Q: what happens to the derivative work right?
A: Canada doesn’t have one and neither should you. But you
should also resist the collapse b/t derivative and dialogic.  A derivative work has to be a substantial
reproduction so we can use this framing to get over the derivative hurdle.
Rosenblatt: comprehensive nonliteral similarity v. fragmented
literal similarity?  You maybe want to
distinguish them.
A: yes.  Sampling
cases—solving a problem that can’t otherwise can’t be solved.  Blurred Lines: they failed to filter out what
should have been. But sampling, you can do the filtering and still look like you’re
left with “golden nuggets” that are substantial, even though there’s a new
Q: so how do you distinguish b/t dialogue and “pinching”? [I
would frame this perhaps as: was Bakhtin’s formulation even set up to contemplate
“infringement” or other acts that might be considered illegitimate moves in a
dialogic chain? What if we care about things other than dialogue—can incentives
fit in?]
A: good Q. Wouldn’t necessarily get Cinar off the hook but would
limit attempt to control downstream uses?
Rob Walker, The Great Disappearing Doctrine: Making Sense of
Scenès à Faire
Doctrinal oddities: has a descriptive take but no solutions
yet.  Scenes a faire is apparently a term
from 19th c French dramaturgy, but he hasn’t been able to find  much/any use there, so if someone can figure
out what the judge who first used the concept meant that would be great.  [Paging Francesca Coppa.]
Hard to distinguish what courts are doing/what is or isn’t a
scene a faire, though we have some definitions, e.g. for software it’s
expression dictated by peractical realities; incidents, characters or settings
which are as a practical matter indispensable, or at least standard, in the
treatment of a given topic—in some ways this is just an application of
What do we mean by indispensable? May be clear in literary
work with traditional structure, like Chekov’s gun.  But what about avant-garde works or genre-busting
works? Isn’t this idea of indispensability just a judgment about what a work
needs to be a “good” version of itself, contra Bleistein?  Is Star Wars a sf film, a fantasy film, or a
western?  What are the conventions that
might be standard to it?  Is an earnest
treatment of a topic using conventions in a traditional realist way
unprotected, whereas a parody of the conventions could be protected, e.g.,
Blazing Saddles and Young Frankenstein and Spaceballs?  What’s the time at which we set a convention—at
the time the P’s work was created, or the D’s? 
Using the conventions of Elizabethan drama to write a new play would be
strikingly unusual today, but not in Elizabethan times.
As courts get into the analysis, scenes a faire tends to
disappear into the ether and is replaced by idea/expression and merger. Example:
Fulks v. Knowles-Carter, in which avant garde filmmaker sued for infringement
in Beyonce’s Lemonade video.  Court’s
attempt to pinpoint scenes a faire collapses into idea/expression and merger.
The exception: software cases where functional elements, programming
conventions etc. matter.  But no guidance
in literary/artistic context. 

Biggest problem: shifts focus away from proper analysis of similarities b/t the
works and their substantiality; talks about the overall genre or milieu
instead.  Underprotects realist works and
over protects genre defying or defining works, creating a Bleistein
discrimination problem.  Sherlock Holmes:
when written, new/creative (maybe; he hasn’t done the research), but at a certain
point this character solidifies into a set of tropes copied in many different
versions over time—eviscerated?  [Public
Fix: return to focus on originality at the time the accusing
work was created. In software, focus on functional/nonfunctional.
Q: relational context from Rosenblatt & Craig—Fulks submitted
his video to Beyonce’s producers.  You
lose the relational element.  Taylor
Swift: the court says that players gonna play is too banal.  Making old lyrics generic.  Timing: can Swift make anything generic
through success? Then we lose something about the contribution of the earlier
Madison: Judicial biography: the judge who used the term
first was committed to balancing access & rights—a pragmatic intervention
along the fair use continuum; another way to get at similar scope problems.
Q: why when we think about genre works it would result in
underprotection? Why wouldn’t recognizing contribution of individual work
result in right-sizing?  Originality
might not give us right-sized results; shifts us to thinking about what the
author contributed, not what the author took.
A: Will look into relational interactions.  May change his under/overprotection analysis.
Rosenblatt: every scene a faire was invented by someone but
we often don’t know by whom. 
Functionally an expiration doctrine?
A: likes that. 
Certain things shouldn’t be protectable. If we start thinking about
originality and take Feist seriously—the bar is low, but it exists—that’s the
right conversation.
RT: Doesn’t originality assessment require an assessment of
prior art? The reason we try to figure out what other works have done is to
figure out what shouldn’t be attributed to the original work of the accusing
author.  And one function of scenes a
faire is that it deals with what the patent folks might call “Obvious to try”: someone
was the first to use the missed phone call instead of the missed appointment at
the top of the skyscraper but that doesn’t mean they should get the rights to
that plot point; see also the Jurassic Park case—once you come up with the idea
of a dinosaur island, certain tropes follow for anyone with minimal exposure to
narrative structures.  That’s the
function of scenes a faire that allows it to parse originality.

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WIPIP: Opening plenary

WIPIP Plenary
[Standard disclaimer: these are just my notes; I miss stuff
or it’s about patents and I don’t necessarily get it; I also have to pick and
choose from many attractive panels and this year I’m only at the first day,
which makes me sad.]
Colleen Chien, Innovation, Inequality, Innovators: 4
hypothesis: Two-pie hypothesis: distribution of patented innovation supports
two stories, increasing abundance and increasing scarcity; innovation  can increase or decrease equality and IP can
play a role (both and); quality of innovation depends on inclusion across the
innovation pipeline (inclusive innovation); to measure inclusion we can look at
inequality and small entities.
1894, Animal trap patent, William Hooker of Illinois—at the
time, Midwest was 2d top region for patenting. Mechanical patent, individual
innovator.  1976, different
representative patent: Goretex, Delaware, chemical patent, innovator working
with his father.  2015, Larry Ellison,
California patent on database automation; 8 other inventors named, many South
Asian immigrants.  California has been
the top patent origin for a while now, mostly just the Bay Area.  Moved away from mechanica, instruments,
chemistry to electrical engineering—now 50% of patents.  Individual inventors are a small percentage
now.  CS grad students: Temporary visa
holders are now over 60%; white Americans going down, Hispanics,
African-Americans, Asian-Americans holding tiny.  Foreign company patenting going up.
Bigger pie: digital abundance, involving diversity and high
skilled immigration, Silicon Valley leads the world and provides consumer
surplus. But: less innovation in mfg; increasing domination by foreign
innovators; domestic brain drain.  So
what is the relationship between innovation, IP, and inequality?  Inequality of production and consumption can
Innovation drives sorting, segregation, agglomeration and
concentration—best institutions get bigger market share, tournament rewards for
individuals who manage to make it to Google/Stanford. Patenting and 1%
inequality are correlated including geographically.  Rigged system (in left and right wings);
privileged patenting and tax avoidance. 
Patent and copyright rents (left wing critique); tech companies buying
up academics and lobbyists and capturing all the gains (right wing critique)—IP
lobbying top clients include Alphabet, Comcast, iHeart Media, Microsoft whereas
in 1998 it was the RIAA, BSA, MPAA while only the BSA is left in the top
ten.  Golden rule: he who makes the gold
makes the rules.  Privileged patenting:
later patent rates for those w/top 3d grade math test scores is highly
associated with parental income.
Inequality in consumption: overinvestment in markets where
rents are possible–$400 juicer in Silicon Valley while tropical diseases go
understudied.  Rent-seeking prices, not
just b/c of patents, but painkillers that once cost $138 now cost $2979.
Innovation and decreasing inequality in production:
innovation can foster growth and social mobility. Consumption: price of
electronic goods has gone down a lot, except for cable service; Larry Ellison’s
surplus creation is at least partly shared. 
Top 10% patenting entities took home 26% of patents in 1900s, now over
60%.  There are industry effects; 83% of
electrical engineering patents are held by the top 1% of holders.  Except for chemicals, there’s increasing
concentration in other fields as well. 
No evidence that first to file disadvantages small inventors, but
further disaggregation of the data (to screen out university entities) is needed.  Small entity share declines over the patent
lifecycle—filing, actual issuance, first, second, and third maintenance
fees.  Are they dropping out or becoming
larger? Seems to be dropping out. Give us pause: we encourage filing at the
front end, but people in small entities don’t seem to be getting as much value
from them, so are we encouraging them to waste their money?
Michael Meurer: isn’t this IT and inequality as much as it
is IP and inequality?  Increasingly hard
time showing up in your data for startups; perhaps it’s increased investment
required in sufficient scale of IT that is a big part of that.
A: There are significant industry effects, true. But tech is
not destiny.  Automation in textiles: low
skilled textile workers gained, but high skilled artisans lost their jobs.  There are other non-IT specific mechanisms
such as capture of institutions; education system; pharma lobbying to set the
Michael Madison: Local/regional aspects—Cleveland, different
than/overlapping with Silicon Valley. Encourage you to push on that part of the
argument.  Industrial, economic, social
history differs in different places.
RT: Having just finished Ta-Nehisi Coates’ recent book, I
wonder whether this isn’t all the result of the specific history of suppression
of African-Americans over centuries.  The
IP professoriate too tracks the results of this suppression.  IP and IT may demonstrate the results but are
they places to look for solutions?
A: Inequality in patenting is one way of tracking inclusion;
it’s one way of rigorously tracking the pipeline.  There are some “valleys of death” in the
pipeline; IP policy may not be the place for a fix, but it is one way to
measure what we are losing.  Institional
history of patent system in specific: patenting was initially limited to
citizens, no slaves or nonwhite foreigners; married women’s patents were also
questionable until the late 1880s. 
Article on the invention of the slave: cotton gin etc. had many
contributions from slaves but masters took the credit.
Mark Lemley: This maps to all US history: all the trends you
describe look like trends in the economy generally/patents aren’t actually
different than the economy but move in lockstep with it, e.g. Gini coefficient.
A: Yes, as an empiricist wanted to see what was going on
w/innovation system and its self-image as egalitarian and meritocratic.
Saurabh Vishnubhakat, Rethinking Patent Law’s Validity Power
Power used to reside ex ante in the PTO, ex post primarily
in the courts; ex post power has been progressively reallocated from courts to
PTO: Bayh-Dole Act, 1980, American Inventors Protection Act, 1999, America
Invents Act, 2011—largely a story about expertise. Neglected story: a desire
for political input. A certain industry/tech, business methods, has been singled
out for special treatment, which isn’t just an expertise story.
How it’s been used in practice is part of the politicization
of the patent process, particularly the validity power: Adjudicatory process
has been used by PTO to do both things Congress intended and things it
didn’t/stakeholders were worried about. 
PTAB panels have been packed w/admin judges who are picked by those on
high. Judicial oversight: resisting review of case selection (PTO uses nonreviewable
decisions as shield from Fed Cir review); evading review of statutory
boundaries; evading review of adjudicatory duties.
Panel stacking: 3 APJs per panel usually, but can be
expanded, which is not random. Supposed to include field experts.  Members are chosen by agency leadership and
can include leadership.  One senior and
one junior person at least—to ensure that new people are acculturated.  The effect is to control outcomes, especially
on rehearing: rehearing may be granted with a different, larger panel.  Colloquoy b/t judge and PTO counsel: “the
Director is trying to ensure that her policy position is being enforced by the
panels.” Consistency & uniformity are desirable, but there are rule of law
concerns.  Target v. Destination
Maternity: original panel was 3 APJs; were about to decide an issue in a way
leadership would have disagreed w; before decision expanded sua sponte to 5
including 2 lead APJs, but still got 3-2 decision holding firm; panel was
expanded again, to 7 with 2 more senior APJs, and finally got the “right”
outcome, 4-3 the other way.
Judicial oversight: more subtle, more defensible but still
ultimately problematic. Past: a finding that no substantial Q of patentability
existed was nonreviewable.  Should a
decision to proceed also be nonreviewable, meaning no interlocutory
review?  Preliminary decision to proceed
would merge into final merits decision, if any. Cuozzo majority disagreed; best argument was the canon against
surplusage, given what the APA says.  But
then what does the statute mean for a decision to proceed in order to be “final and nonappealable”?  The high standard for presumption of judicial
review to be overturned from the APA was not met, in SV’s opinion.  Cuozzo
was a strong victory for the PTO, allowing additional claims to unreviewable
discretion. Why is this so potent a vehicle for policy autonomy?  The validity power is exercised
separately—power to screen cases for likely merit, and separate power to
adjudicate cases actually chosen. Decision to screen is directed to Director by
statute, which is subdelegated to the PTAB which has power to adjudicate, but
there’s no statutory command and it may be problematic to have the same panel
do both. Screening is unreviewable, and adjudication power is reviewable.  That reviewability is a key factor in the argument
that the scheme is constitutional and appropriate. Natural agency incentive:
make things look more like screening than adjudication, and it’s not that hard
to do b/c screening std is whether there’s likely success on the merits.
Stacking has some justification in uniformity; SV thinks
that there’s even an argument for Chevron deference when the Director is
sufficiently clear.
Costs: injury to stable property rights; injury to credible
commitments of Congress and agency; self-reinforcing injury to oversight—can
you trust the Directors who come after not to exercise their political power
against us?
Solutions: make it more judicial.  Have some decisions be precedential if you
like them; make decisions precedential and train APJs to follow them.  Done for ex ante clarity.  Also: separate screening from adjudicating,
raising the cost for the agency to evade review.
Betsy Rosenblatt, Copyright’s One-Way Appropriation Ratchet
Rolling Stone review: Beck incorporates a “cross
pollination” of styles which shows him to be one of the most innovative and
forward-looking artists—he used hip hop, soul, etc.
Courts sent a very different message from Rolling Stone when
hip hop artists sample—start with scare quotes around “rap music” and intoned
“thou shall not steal.”  Similar message
to NWA from 6th Circuit: get a license or do not sample; this
doesn’t stifle creativity at all.
In 2016, the 9th Circuit disagreed w/6th
Circuit for de minimis copying; the infringer in the 6th was the
NWA, whereas in the 9th the noninfringing defendant was Madonna, and
the plaintiff was a group of African-American musicians, even though Madonna
adopted the cachet of a subculture not her own.
If you make slides for class of music cases, though there
are exceptions like He’s So Fine, mostly white artists appropriate with
impunity and are often lauded, but minorities who appropriate find legal
challenge and often moral condemnation. 
This is a social as well as legal product, reflecting societal and
judicial bias but it’s also systematically baked in to the discourse of value
in © law and practice.
© presents as facially neutral but inherently/discursively
assigns value to some expression over others. Doctrine combine with judicial
attitudes and risk imbalance to reflect and reinforce racial bias.
Responses are often to give more ownership to oppressed
peoples, and there is sense to this, especially if we’re interested in profit
maximization.  Merges/Hughes
proposal.  If one’s goal is to create a
few especially wealthy members of minority groups, expanding substantial
similarity is a tool, but that is unlikely to promote equality broadly and
ignores the wider effects on creativity by favoring artificial concept of
originality.  That proposal also doesn’t
help those who don’t have resources already or who want to talk back to
inequality.  Don’t double down on a
flawed system; adjustment has to come by making it thinner in a way that
recognizes the dialogic nature of expression.
The traditional is reduced to the primitive; the doctrine
freezes works and attributes ownership to anyone who fixed them.  Devalues improvisation and creates a “right”
version of the work. Derivers from “unauthored” works get to own the whole
thing; this lets them create the narratives/colonize the work of minority cultures,
taking from but not giving back—Deep Forest can stop others from similarly
using the work of Solomon Islanders. Makes it seem that they have more value
than those they’ve built upon—assigns value to things that might just be
practical limits on ©’s grant of exclusivity.
Have to use dominant works to critique dominant narratives,
but cramming this into fair use distorts the activity—makes Alice Randall call The Wind Done Gone a parody.  Makes the use for critique more risky.  Semiotic disobedience would be even harder
w/thicker ©.  People who don’t trust the
system are more likely to withdraw/refrain under conditions of uncertainty.
Minorities are less likely to register, to own (as opposed
to transferring—Spike Lee in Malcom X; George Clinton’s works are owned by an
unrelated party).
Takeaway: more of the same isn’t better. Not interested in
tearing down copyright.  More recognition
that all communication is in some way derivative.  A deriver should be understood to own only
what’s contributed to the “prior art”—allow more derivation and appropriation
by all. 
Vishnubhakat: you seem to posit crowding out of © space;
doesn’t that mean that if you allowed closer imitations the “more” innovative
minority voices would be crowded out?
A: Doesn’t posit crowding out; doesn’t mind appropriation as
long as the appropriators don’t get as much out of it as they do now.  Doesn’t see it as a zero sum game: there’s an
infinite capacity for creative expression.
Lunney: Note that the most wealthy African-Americans come
disproportionately from the © space compared to whites; should that change the
A: No: many of them are actually from negative spaces like
fashion, cuisine, talk shows, the famously constrained hip hop. Also making a
few people rich is not a social justice strategy.
Q: One way downward ratchet? 
Some examples of cases are minority v. minority. Should we relax the
standard for fixation? 
A: gut instinct is that relaxing fixation would benefit
improvisers in particular, which might be good. But it has all sorts of
practical difficulties.  A lot of these
doctrines exist for good, practical facially neutral reasons. We should think
about mitigating their disparate impact. 
Termination of transfers also has its place.

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court awards sanctions for misrepresenting website as independent review site in false advertising case

Purple Innovation, LLC v. Honest Reviews, LLC, 2018 WL
840035, No. 17-cv-138 (D. Utah Feb. 12, 2018)
A rare sanctions order in a false advertising case, in which
the court grants sanctions based on the defendants’ submission of misleading
and false statements to the court in opposing PI’s request for preliminary
injunction. PI sells bed-in-a-box mattresses and other bedding products and relies
strictly on e-commerce, meaning that online comment and review websites can
have a significant impact on its business. A new mattress review
website—www.honestmattressreviews.com—owned by Honest Reviews and operated by its
sole owner, Monahan, began to post reviews.  The HMR website repeatedly stated that it wasn’t
influenced by any mattress company and that it didn’t receive financial
compensation for its reviews, e.g., HMR was “free from corporate or
conglomerates…[that] silence or shape editorial narratives and truths,” and
HMR posts “have total editorial independence” for which “[n]o one has
HMR’s reviews or “articles” about PI’s products suggested a
link between a white powder used on some of Plaintiff’s products and
cancer-causing agents, for example comparing the powder to a “ground
down…plastic mustard container” or “glass coke bottle,” which consumers will
inhale every night for “eight to ten hours.” PI received low marks on the HMR
site, including an image of a large red “X,” while its competitors, including defendant
GhostBed, received favorable ratings. 
PI’s lawsuit alleged that Monahan, the sole owner and
operator of HMR, was closely affiliated with GhostBed, making the purported
“reviews” actually commercial advertising and promotion that “materially
misrepresented the nature, characteristics, and qualities” of PI’s products,
while failing to disclose the close affiliation with its competitor. The court
initially denied a motion for a TRO, then granted it after PI showed multiple
attempts to notify defendants of the case, “including indications that Defendants
had received actual notice and that Defendants appeared to be avoiding service
of process.”
PI then moved for contempt, based on an alleged failure to
comply with the TRO.  Defendants opposed,
submitting declarations by Marc Werner (CEO of GhostBed) and Ryan Monahan. Werner
stated that “GhostBed does not have any affiliation whatsoever with
co-defendants Honest Reviews LLC or Mr. Monahan,” with no control or
compensation relationship with HMR.com. 
Further, Werner stated, when Monahan identified himself on Twitter and
LinkedIn as “Chief Brand Officer” of GhostBed, he did so “mistakenly.”  Werner acknowledged that GhostBed used Achieve
Marketing for branding and marketing consultation services and that “[i]n the
past, Achieve used another entity, Social Media Sharks, to consult on online
presence issues for its clients, including GhostBed.” Social Media Sharks was
associated with Monahan, but Werner did not acknowledge any current
relationship between GhostBed and Social Media Sharks or GhostBed and Monahan.  Monahan’s declaration was similar, though it
stated that Achieve used Social Media Sharks to provide contracted services
with GhostBed. Monahan stated that the website had a single source of income, Google
At the hearing, Monahan’s counsel “strongly argued that
Monahan was an independent journalist entitled to full protection under the
First Amendment,” and that Monahan wasn’t hiding his status as a contractor. GhostBed’s
counsel also stated that no relevant business relationship existed between
Monahan and GhostBed, stating that “Monahan is a marketing consultant and he
works for many, many organizations and clients …, including GhostBed[.]” Based
on these representations, the court dissolved the TRO.
PI later renewed a motion for a preliminary injunction with
a newly obtained declaration from GhostBed’s former Director of Marketing,
Calisha Anderson, who “confirmed the bulk of Plaintiff’s suspicions regarding
the relationship between Monahan and GhostBed.” 
She declared that, shortly after beginning her new job, she learned she
had “very little actual authority for GhostBed’s marketing” and Monahan “was
the real ‘Director of Marketing.’ ” Monahan controlled the GhostBed website,
was active in participating in staff meetings, used a ghostbed.com email
address, held himself out as the Chief Brand Officer, and was able to veto
Anderson’s decisions.  Anderson also stated
that GhostBed made similar claims about the powder on PI beds.   
Monahan’s counsel called the declaration “lies” and expressed
hope that she’d be charged with perjury when he showed that she lied.  The court decided to hold an evidentiary
hearing. That hearing established, among other things, that Monahan continued to
provide extensive marketing services to GhostBed, for which Social Media Sharks
received $10,000 per month, half of which went to Monahan; he also helped
GhostBed place competitive ads that targeted PI. The court concluded that
Monahan and Werner had materially misrepresented the relationship between HMR
and GhostBed, as well as Monahan’s status as an independent journalist. Anderson’s
credible testimony wasn’t seriously challenged by cross-examination. The court
thus entered a preliminary injunction, after which PI moved for sanctions.
In determining the appropriateness of sanctions, courts consider
“(1) the degree of actual prejudice to the [party requesting sanctions], (2)
the degree of interference with the judicial process, (3) the litigant’s
culpability, (4) whether the litigant was warned in advance that dismissal was
a likely sanction, and (5) whether lesser sanctions would be effective.” The
court found significant prejudice here—the dissolution of a TRO, depriving PI
of the injunctive relief it deserved and requiring PI to spend time and
resources to get its injunction a second time. There was also “substantial” interference
with the judicial process here was substantial. “Defendants and their counsel
adamantly defended misleading representations that Monahan and GhostBed had no
meaningful association and that Monahan was a consumer journalist entitled to
the fullest possible protection of the First Amendment,” resulting in a full
day evidentiary hearing to determine the truth.
Defendants now conceded that the misrepresentations “lacked
the level of candor and attention to detail necessary to ensure that all of the
material facts were clearly stated and understood by all parties and the Court”
but claimed they were “made in the heat of battle.” But “Monahan, Werner, and
counsel for each were given numerous opportunities” before the hearing to
correct and clarify previous, misleading testimony, but they “doubled down”
instead. There was no explicit advance warning that misleading the court by
sworn testimony was sanctionable conduct, but they should have known that, and
Monahan’s lawyer’s statements about perjury demonstrated his clear
understanding of the potential results of submitting a false declaration to the
court.  “Indeed, … the misrepresentations
by Werner and Monahan were sufficiently egregious that perjury prosecutions
would, and perhaps should be, an appropriate consideration.”
Given the egregious nature of Werner’s misrepresentations,
the court struck GhostBed’s counterclaims as an appropriate sanction, along
with the award of PI’s reasonable attorneys’ fees and costs expended in
pursuing its second motion for a preliminary injunction and the sanctions
motion, shared jointly between Monahan/HMR and GhostBed. “The court will also
issue an adverse jury instruction if deemed appropriate when this case goes to

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Settlements allowing competitors to use term doesn’t insulate Clorox from its own possible deception

Gregorio v. Clorox Co., 2018 WL 732673, No. 17-cv-03824
(N.D. Cal. Feb. 6, 2018)
Gregorio alleged that, to capitalize on consumer demand for
“natural” home cleaning products, Clorox falsely advertised its “Green Works”
cleaning products as “natural” or “naturally derived.” The “naturally derived”
representation appears above the cleaning product type:

The back label of each green works products has an
ingredients list, and refers consumers to two websites. The
greeworkscleaners.com website concedes that the green works products are not
entirely naturally derived: “[T]he products are “95% to 99% naturally derived …
such as filtered water, plant-based cleaning agents, essential oils, corn-based
ethanol and wood-based fibers. The other ‘1% to 5%’ are a combination of
preservatives, fragrances and dyes.”  The
ingredientsinside.com website lists each particular products’ ingredients, but doesn’t
indicate whether the ingredient is natural or non-natural.
Plaintiffs alleged that the products fail to meet reasonable
consumers’ expectation and definition of all-natural products, and they brought
the usual California claims, as well as New York claims and Magnuson-Moss
Warranty Act claims (the last of which was dismissed for failure to allege key
facts about the value of the transactions).
Clorox argued that reasonable consumers wouldn’t have been
misled by “naturally derived.”  It
pointed to various disclosures, and to three class action settlements involving
competitors’ products that used the terms “100% natural” or “all natural.”  In the settlements, competitors agreed to
stop using the terms “100% natural” and “all natural” and instead use the terms
“naturally derived” or “natural,” as well as to provide additional ingredient
information on their websites. Clorox already does these things. Clorox argued
that these court-approved settlements showed that a reasonable consumer would
not be misled, “particularly given that one of those cases was pursued and
settled by the same lawyers pursuing this case.”
True, the companies party to the settlements “now have
strong defenses against any future class action challenging their use of ‘naturally
derived,’” which Clorox doesn’t have, and if the plaintiffs here win, . “Clorox
may no longer be allowed to use the exact same phrase as its competitors can
use with theoretical impunity.”  That’s
unfair, but there’s no authority showing that potential unfairness overrides
the reasonable consumer test.  “Further,
private settlements cannot and do not serve as a substitute for the court’s own
determination regarding whether it is plausible that Clorox’s labeling would
deceive a reasonable consumer. In fact, those settlements—involving different
parties, litigating over different products, displaying different allegedly
deceptive terms—barely amount to persuasive authority that a reasonable
consumer would not be misled by the labeling at issue here.”  Plus, “by their very nature settlements are a
product of compromise that involve numerous variables.”  Too bad for Clorox.
Further, the complaint plausibly alleged misleadingness. “It
is not unreasonable as a matter of law to expect a product labeled ‘naturally
derived’ to contain no synthetic ingredients. It is also far from unreasonable
to expect the same product to contain only ‘naturally derived’ ingredients—a
representation apparently contradicted by defendant’s own website.” Though
“100% natural” and “all natural” would also be misleading, “the court is not
free to dismiss claims because defendant chose not to use a potentially more
misleading phrase.”  The ingredient list
didn’t shield Clorox from liability, because reasonable consumers expect it to
include more detailed information, not to contradict other representations on
the packaging. A jury would have to decide.
Nor would the court stay the case under Clorox’s hail-Mary
attempt to invoke the primary jurisdiction doctrine, based on the FDA’s
rulemaking regarding “natural” foods that began in November 2015. The FDA doesn’t
regulate the cleaning products at issue here.

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TrueNorth not truly famous, court rules on motion to dismiss

TrueNorth Companies, L.C. v. TruNorth Warranty Plans, LLC,
No. C17-31, 2018 WL 794700 (N.D. Iowa Feb. 8, 2018)
TrueNorth sued TruNorth for trademark infringement and
dilution based on their respective marks; here the court dismisses the dilution
claim for failure to plausibly plead fame.
TrueNorth alleged that it consistently used the word
“TrueNorth” and two specific logo designs in commerce in connection with its
business since 2000. Since 2001, TrueNorth invested well over $30 million in
marketing efforts to strengthen the TrueNorth brand.  It alleged that its brand was “well-known and
recognized in the transportation industry as a leader in insurance and
financial strategies, as evidenced by TrueNorth’s partnerships with some of the
nation’s leading motor carriers, as well as TrueNorth’s work with
transportation associations.” It also had three registered marks.

TrueNorth argued that it had done enough to plausibly plead
fame under Twiqbal, and cited cases
allowing minimal pleading, including a case accepting that BoatU.S. and
TowBoatU.S. were plausibly pled to be famous marks.  Nope. 
Dilution fame requires fame beyond a niche market. “While the pleading
standard itself is not rigorous and this type of claim is not subject to a
heightened pleading standard (such as claims that fall under Rule 9(b)), the
nature of a dilution claim itself makes it difficult to ‘state a claim to
relief that is plausible on its face.’”  
Even accepting TrueNorth’s allegations, they fell well short
of plausible fame, a rigorous standard. 
Allegations of $30 million in marketing efforts since 2001, with no
further details regarding the extent or geographic reach of its advertising and
publicity, were too vague.  TrueNorth
alleged that it has offices in six states, provides financial and insurance
services to a wide variety of client types across the United States, and
services clients around the country, but that wasn’t enough detail in terms of
“amount, volume, and geographic extent of sales of goods or services offered under
[its] mark.”
Conclusory allegations that the brand was well-known and
recognized in the transportation industry, as evidenced by its partnerships,
were insufficient because a mark’s fame must go beyond a niche market, such as
the transportation industry. And registration alone was insufficient to
establish plausibility of dilution fame: “[o]ne cannot logically infer fame
from the fact that a mark is one of the millions on the Federal Register.”  Dilution claim dismissed.
[Comment: given the similarity of the parties’ marks, is
dilution likely to be an important issue?]

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