IPSC breakout session 2

IPSC Breakout Session II: Trademarks, Advertising &
Consumers
Relying on Reputation
Jim Gibson
Reputation: what rational consumers would use to decide what
products/services to buy. We shouldn’t expect that info to be widely available
to consumers w/o some help, and yet the law assumes that the market for
reputation works enough to rely on it.
Public goods problem: each of us has our own reputational
experiences w/firms. We can generally rely on it but it’s anecdotal: we want
aggregate information.  My review
externalizes my benefit but without reward, so we’d expect underproduction.
Reputational aggregators can help. But their interests may not be aligned with
consumers’; no movie has ever had less than 3 stars on Fandango, and Yelp sells
its services to businesses rather than to consumers. 
IP rights: find a party interested in creating/disseminating
the good & give them exclusive control. The firm: They don’t have the
externalities problem b/c they internalize benefits of buying.  But the firm’s interest is in creating
positive/bottom-line maximizing info, not accurate representations of quality,
price etc.  Consumers are manipulated
into believing untrue things simply through repetition. If a firm tells
consumers that its coffee isn’t bitter, that affects consumer perception even
though consumers know the info comes from self-interested firm.
Courts think that info about firms will solve problems with
boilerplate contracts.  Reputational
constraints as keeping firms from enforcing onerous terms. If reputation doesn’t
work that well, reliance is misplaced.
TM law: core infringement dovetails well w/reputation
approach, but expansions don’t—dilution by tarnishment; lack of control over
assignments/licensing; ways in which mark itself is viewed as having a
reputational value qua reputation as opposed to something that provides
accurate information.
Defamation: Really about the truth, not about reputation. I
can destroy reputation by revealing the truth. 
Bill Cosby: invested a lot in reputation as America’s dad, which has
since been destroyed. Defamation has it right.
RT: Many people enjoy providing reviews/perceive it as a
positive.  Why isn’t that enough? Do
those people who enjoy providing reviews differ in some systematic way from
those who don’t?
A: Spite is a powerful motivator; what about good
experiences?  There’s probably a
relatively low level of crowdsourcing that’s necessary; eBay is probably a
really good reputational system b/c it’s costless to share.  People are more attentive to recent ratings
than aggregate ratings.  It may not be
enough.
Lisa Ramsey: there are fake comments; sometimes there are
verified reviews.  I also look for number
of comments/negative comments.  It’s so
easy to comment now.  [I think this is a
matter of leveraging reciprocity norms; Ramsey mentions guilt.]  I feel good when I reply to surveys about
performance—I’m performing a public service.
A: True, but that feedback often just goes to the firm—helpful,
but not fully solving the problem.
Michael Madison:  Doesn’t buy the tragedy of the commons
framing. There are all sorts of info problems, including overproduction,
reciprocity problems (seller worried about giving poor rating out of fear of
getting poor rating), asymmetry, information that is out of date (right to be
forgotten), etc. Account for what’s going on in the world by adding more of the
complexities.  Push back on reputational
information as a “good.”  [Arrow’s
information paradox
.] As if there were a simple definition of what that means;
as if there is a natural social interest in “accurate” reputation as opposed to
collection of opinions.  Precisely
because we have all these mechanisms to share opinion, how much of that is the
right amount is a contestable thing. As you frame this question, which is an
important one, you need more dimensions to the model to capture some of the
looseness and fluidity of what’s going on rather than treating reputation as a
species of good that was produced by manufacturing.
Going Native: Can Consumers Recognize Native Advertising? Do
They Care?
David Hyman & David Franklyn
A couple of small empirical studies and armchair empiricism;
lots of regulatory interest.  Lots of
argument by invective (John
Oliver
) and blanket denials and media angst. Regular ads as control; native
ads as treatment.  If consumers don’t do
a good job ID’ing them, can we change the disclosures to improve that?  What do labels even mean to consumers? 
Online survey of 1000 respondents, who saw 18 images/2
videos. We tested things like Forbes content by Fidelity aka “ForbesBrandVoice”
which doesn’t have “paid,” “ad,” or “sponsored.” The Onion also has paid
content: Woman Going to Take Quick Break After Filling Out Name, Address on Tax
Forms: small “sponsored,” actually for H&R Block.  NYT’s Netflix article w/very tiny “paid ad,”
and Atlantic’s native ad for Scientology that looks exactly like Atlantic
article except for “sponsored content.”
Respondents do much worse identifying native ads than
regular ads.  Native: 37% thought it was
paid content.  Regular: 81% ads.  49% thought native ads were unpaid v. 12% for
non-native; remainder unsure.
What if we tweak the label? 
In-your-face “paid ad” bar across the Fidelity ad: those who saw “paid
ad” went to 56% understanding from 40%, suggesting that modifications to
labeling can make a difference, though still well short of understanding for
regular ads.
Finally, asked whether respondents thought each label was
paid, unpaid, don’t know.  Paid ad/paid
content/this content was paid for by/paid post/ad all did better than 80%;
sponsored did 79%, sponsored content and sponsored post 76%; brand voice/brand
publisher/presented by in the 60s and partnered content/partner was at 57%. Written
by: 23%.  So many labels are bad and the
diversity is not helping anything.
Limitations: representativeness of our ads?  Of our sample population? Used reputable
organization but replication should be tried. 
Validity of our approach: we threw out people who went through too
quickly or didn’t answer our attention question, but this isn’t in the wild,
and we’re open to alternative methodologies if they exist.
Consumers do much worse at identifying native ads than “regular”
ads, regardless of brand, platform, architecture, and labeling.  If they’re trying to hide the fact that they’re
running ads, mission accomplished. 
Evidence of two-way blurring; even modest tweaks materially improve
recognition; does any of this rise to the level of deception?
RT: two-way blurring?
A: if you give people unpaid editorial content, a material
number think it’s actually paid, 35%.  A
little variation across examples.  From
consumer protection perspective, that’s not something the FTC would much care
about.
Barton Beebe: will consumers develop sophistication about
this?  People have learned about movie
sponsorship.  [armchair empiricism?]
A: Possible, but the variability is much higher.  Movie = single thing that people see
together, but native ads have huge variation and narrowcasting.  Harder to police given speed of emergence.
Lisa Ramsey: 4% of people thought it was unpaid when it said
paid—are there certain kinds of people who are making that mistake?
A: people who participate are over 18, relatively good
cross-section of community. 
Disconcerting that people don’t always recognize “paid ad” as ad, but
that’s how people are—they don’t look at labels.
McKenna: consistent w/TM surveys!
Laura Heymann: what would deception mean here?
A: FTC says: you don’t have to prove actual deception; the
more you blur the lines, the easier FTC enforcement action would be. We did ask
whose content you think this is, advertiser or platform or both—w/native ads,
pretty substantial #s thought it represented both the advertiser’s viewpoint
and the platform’s, though that’s not the same as deception.
Q: wide variety of examples—they may involve different
relations between the platform and the sponsor. Sometimes the content was
written by the platform but paid for by someone else v. written by advertiser
and posted on the platform. Does that make a difference?
A: A lot of the media companies have set up in-house
operations for native ad campaigns to be sold to advertisers.  We don’t see a difference based on that issue
in people’s perceptions.  The development
of in-house units probably increases the likelihood of deception b/c they can
frame the content to be exactly like the publication they’re working for.
Naming and (Re)Claiming
Laura Heymann
What makes something a name and how much do audiences assume
that a name has connotative and denotative functions?  The meaning of a name comes from the public.
You can announce your name as whatever you like, but it’s not unless a
sufficient number of people adopt it for you, even if you use it. Same for a TM—recognition
of a mark as a mark/name is what gives it existence. Richard Craswell’s great
article on sports nicknames—crowdsourced. Research on prison nicknames:
bestowed upon people, not given to themselves. 
Inherent in this process is recognition that a lexical unit is
functioning as a referent and not as a description. 
Referring: repetition and reinforcement.  If meaning of a term becomes fixed, is it apt
to say that a name has truth value?  We
don’t expect a man named “Rich” to be wealthy; we recognize that as his
name.  A “rigid designator”: our beliefs
about qualities of subject aren’t relevant to the referential process. It doesn’t
matter if someone loses a limb; they’re still the same person with the same
name; so too if it turns out they plagiarized a paper. TM embodies that in some
way—TM doesn’t require TM owner to surrender TM if it changes ingredients,
suppliers, employees who make the product.
If names are rigid designators, we might return to In re Tam
and ask whether a name can offend or disparage, qua name.  A word can do so when used to describe
others, and research on slurs would say that a slur is offensive b/c it is
uttered by a person toward another person, not necessarily the word itself.
This is Tam’s entire point: the ability to reclaim a word means that whether
that word has communicative/truth value depends on the identity of the
speaker.  One reason offered by court to
refuse to approve a name change was b/c of speech burden imposed on others who’d
have to use the name in exchanges w/others. 
This is a strategy employed by Starbucks customers in reverse: give name
as “black lives matter” so barista will have to say that out loud.
Slurs convey expressive content: conveying attitude of
speaker.  The idea of reclaiming is to
deprive the word of meaning and transform it into a rigid designator, same as
when McDonald’s reclaims MickeyD’s.  Are
names truth?  Pursuing America’s Greatness
v. FEC: can independent political committees use candidates’ names in the names
of their committees or projects?  DC
Circuit finds that’s content based discrimination, and it’s not enough to be
able to use the candidate’s name in the content of the project/webpage.  That’s what she’s interested in—what do we
mean when we say that something functions as a name? Are they sometimes true,
never true, etc.?  Bands named “Cheap
Girls” w/no women performing in them: is that deceptive? Is it a signal?  Would the Slants be disparaging or not
depending on the ethnicity of its members?
Relevant doctrines: When we allow TM to reemerge from
genericity: Singer, Best Buy (once it argued in court that the phrase was
generic!); public use doctrine allowing TM owner control over a term that the
public uses to identify the TM owner but the TM owner doesn’t; abandonment; §2(a)
bar on deceptive marks.  ORGANIK for
clothing not made from organic fibers: if people use that to tell what the
clothing is made of, then they’re seeing it as informational device and not as
a rigid identifier and therefore it isn’t functioning as a TM should.
Madison: how much do you need to invest in framework of
rigid identifiers, partly b/c there’s an enormous literature around that.  Tam case may be too rich; what about the
dispute over the ownership of “Stephen Colbert,” the “character” from CC’s “The
Colbert Report.”   Captures the themes you’re talking about w/o
triggering disparagement concerns.
A: two different things embodied in the same person! 
Q: Whose perspective are we taking? What happens if they
intend it as a name, and it’s understood as a name by some people and not by
others.
Ramsey: slogans can be identifiers, but they don’t have to
be.  How do you think about them?  “Make America Great Again” is not the same as
“Trump.”  Also, Lee et al.’s paper on how
context is key—you don’t know if a name is a mark until you see how it’s
presented.
A: there has to be an initial moment associating the name
with the thing; they don’t exist in the abstract.
[Still marshalling thoughts about this. I think the answer
is often that a TM can be a rigid identifier and convey lots of information, including w/Best Buy and ORGANIK—in
fact, the aim of creating a rigid identifier may often be to convince consumers
that certain characteristics are embedded in the product being sold no matter
what the facts are, the ingredients are, etc. 
That’s why TM owners like descriptive marks; that’s why VIAGRA invokes
vigor, Niagara, etc. Thus, making a binary may not be hugely helpful.]
Why Does Trademark Law Protect the Strong More Than the
Weak?
Barton Beebe & Scott Hemphill
Strength, scope, and competition in TM law: Not a purely
original argument—we’ve all been thinking this forever, but people haven’t
systematically presented this basic argument except in a Judge Rich opinion in
1988, suppressed by J. Rader very quickly thereafter.

Standard view: there’s a positive relation b/t strength and scope. This is
wrong, at least in part.  Rationale for standard
model: strong marks are more easily activated in consumer’s mind; consumers
will infer that junior use originates in senior user; infringers can be assumed
to target stronger marks; consumers approach more famous marks with less
consumer care—just asserted by Fed. Cir.
Assuming identical marks, a product dimension (x), and a
percentage of consumers confused (y), a curve describes consumers likely to be
confused by use on competing goods, related goods, or even unrelated goods.  Consumer population is diverse.  Maximum acceptable percentage of consumer
gives us the scope of the right at issue. 
Increased strength of a mark may push up the curve and broaden the scope
of the mark, but the standard model assumes the shape of the curve remains the
same as it’s pushed up.
Now assume identical products, a mark dimension (z), and
percentage of consumers confused (y), same thing.  A 3D distribution will describe the proportion
of consumers likely to be  confused by
junior use of mark identical, similar, or dissimilar to senior mark on
identical, similar, or dissimilar goods.
Standard model assumes that increased strength increases
likely confusion and increases scope of mark. Other assumptions: The relation
between strength and confusion/scope is always positive—except in the limited
cases of reverse confusion and, controversially, parody.  Strength operates the same way in identical
mark, different goods cases as it does in different mark, same good cases.  Case law under either situation is
interchangeable. Inherent/acquired strength operate in the same way, and cases
about inherently distinctive marks can be cited in cases about secondary
meaning.
Judge Rich: BVD v. Body Action Design (Fed. Cir. 1988): BVD
v. B.A.D. for men’s undergarments. The fame of a mark cuts both ways. Better
known it is, the more readily the public becomes aware of even a small
difference. BVD would trigger the observer to notice at once that BAD, with or
without periods, is a different symbol. 
See also Jiffy v. Jordan (CCPA 1973) (Rich, J., dissenting). A few other
cases have made similar observations.  A
few articles also question the correctness of the claim, but Jerre Swann
defends it.
Kenner Parker Toys v. Rose Art (Fed. Cir. 1992) (Rader, J.)
Play-Doh v. FUNDOUGH for toy modeling compounds.  TTAB applied BVD and dismissed
opposition.  Rader says: free riding
justifies the positive relation—competitors want to snuggle as close as
possible to a famous mark. Fame could never be a liability in TM—while scholars
might debate as a factual proposition whether fame heightens or dulls the
public’s awareness of variances in marks, the legal proposition is beyond
debate.  If investors forfeit legal
protection by increasing fame, the law would then countenance a disincentive
for investments in TM.
But we can solve this problem: begin w/assumption that TM’s
guiding purpose is to promote competition; consumer protection is underneath.
Free rider justification isn’t persuasive w/r/t continuously positive relation
b/t strength and scope/confusion. Identical marks, there is a positive
relationship b/t strength and scope/confusion. But for similar marks, competing
products, there is a local maximum.  The
3D distribution may rise, but also changes shape. Proportion of consumers
confused may increase, but scope of protection narrows.  Follows a fortiori that superstrong marks
would also be less protected for similar marks, similar products and similar
marks, dissimilar products.
Heymann: does sponsorship/affiliation confusion complicate
this?  E.g., Boy Scouts and Peewee
Scouts.
Beebe: Best I can do for now is to fall back on the idea of
TM as both prescriptive and descriptive; can prescribe a condition in which
consumers learn.  It may be that the
association challenge is devastating for some things, but similar marks/similar
products and similar marks/dissimilar products might be different b/c of
consumer understandings about famous brands. If you saw something like the Apple
logo on a very low-end tech product, you might reject the idea that it came
from Apple.
McKenna: This isn’t really an empirical rule, but modern
doctrine’s obsession w/confusion requires it to pretend that it is.  Your argument at the end seemed nonempirical.
You need to clarify: is this empirical? If so: Look at brand extension
literature.  Also: when you talk about
similarity, note that people have hard
time w/specificity of visual marks
but may do better on word marks.  [Though there is also a huge difference b/t
production and recognition worth thinking about, since it’s recognition that TM
law is generally concerned w/.]  Then if
it’s empirical, think hard about different forms of confusion.
Branded
Irina Manta
TM provides important incentivizing functions that make it
more like © or patent than conventionally assumed, and we should care about
that. Traditional story: TM are instrument of commerce, protected under
Commerce Clause, not incentive for creation/innovation.  TM as red-headed stepchild of IP family.  Three traditional functions: source
identification, advertising, and quality guarantee.  Neglected incentivizing functions: creation
of original marks; hedonic benefits of loving TMs; socially desirable behavior
[work hard so you can afford your Louboutins, or at least your Nikes].  [This is like claiming that securities law
exists to encourage people to work hard and make more money.  It has a level of generality problem, among
others. Also query whether all incentives to work hard and make more money, if
those are the same thing, are socially desirable; see, e.g., drug money, Wall
Street finance, Donald Trump.]
Expansion of TM law over time beyond source confusion to
affiliation confusion, dilution, initial interest confusion, post-sale
confusion.
TM as creations: often the most valuable asset of a
business, e.g., Starbucks.  [Deven Desai
would say this is conflating a TM with a brand.]  Companies invest $ in infusing brands w/a
personality: SoulCycle isn’t just a name, it’s a lifestyle, also Harley
Davidson.  [Though note that these
lifestyles are usually shared w/ other brands as well—they’re not creative/unique
even if it takes intelligence, luck, and even creativity to come to “symbolize”
that lifestyle.  Or you could just be
like PBR and be adopted by hipsters for a time.] Takes on life of its own.  TMs can be included in art exhibits.
TMs as hedonic goods: experience of goods = happiness, just
as via © or patent. TMs are inherent parts of products; there is no defensible
distinction b/t “real” and “artificial” experiences of marks.  [Though the research on body image etc.
suggests that people who spend a lot of time thinking about their presentation
to the world end up unhappier and also poorer off in other ways, so I’m not
sure that conclusion holds here even if it might re: your perception of a car’s
value.]
TMs as socially desirable behavior incentives: People use
branded goods as self-rewards; I can have Starbucks b/c I did such a good job
today. Possible correlation in US b/t working longer hours and desire for brand
consumption. Use of branded goods to overcome bias and achieve community status—anti-aristocratic
b/c you can become more equal by wearing certain things or appearing a certain
way.  Wearing a nice suit to
interviews.  [A branded suit? Tressie McMillan
Cottom has a great
essay about this
, but TMs don’t seem to be required.]
These incentivizing functions have increased in importance
over time. This brings TM closer to copyright and patent, and needs to be
considered in making policy.
Gibson: what implications are there for TM scope?  If we had a law that focused on source
confusion and not dilution etc., would people not find alternative hedonic
pleasures/ways to reward themselves for working hard?
A: given the state of the empirical data, it would be
speculative to say. Doesn’t know whether we need dilution to get those things.
This is the law we have.  Not necessarily
enforced strongly, but might still provide a deterrent. There are also 1A
implications w/dilution. But we can’t divorce TM law from other social policy
as others have done, where we pretend that only confusion is at issue.
Madison: Timing of the shift in case law in relation to
this?
Manta: thinking about how we could measure brand development—going
from TM as boring, traditional function to powerful.   Measuring strength of marketing, penetration
of advertising.
McKenna: circularity: you say we have to account for how
people interact socially w/brands, but that’s the result at least in part of
how the law has treated brands.  Even if
we wanted to preserve hedonic value, consumers would likely find it somewhere
else, and if we don’t know that, the policy payoff is unclear.  Also, there are other people who get hedonic
value from access to brands, or access to similar brands; if we do a whole
hedonic calculus we have to consider them too. If we want to consider
incentives to work hard, TM would not be the place to start—tax, education
policy would be more appropriate.
Manta: yes, utilitarianism is hard, but we have to start
somewhere. This matters too.  Hedonic
value of access to brands, knockoffs—but there are also people who don’t care
much about brands.  [?]  In this room, we probably chose our jobs b/c
we cared less about money than making partner, but others chose
differently.  Some criticisms of dilution
have disregarded these incentives, and have assumed that brands are just about
false needs.
Ramsey: even if the empirical research shows that people are
doing what you say, should we care? The costs of dilution protection are also
higher—protecting these values has different tradeoffs than protecting against
confusion over source.

Manta: there haven’t been economic discussions about
dilution’s harm/benefits.  It’s all
highly theoretical, speculative.  I don’t
know which way it cuts, but that doesn’t mean it’s not a real effect. Skeptical
that dilution has had more than a marginal impact on speech.

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