Notre Dame Law Review Symposium, Panel Three

Moderated by Shubham Mukherjee
Graeme B. Dinwoodie, University of Oxford Law, “Territoriality
in the Protection and Enforcement of Trademark Rights”
As trade becomes more geog. expansive, so too do TM rights
need to expand. Not new: goes back to 1883 Paris Convention.  Madrid Convention starting in 1890s, updated
for 20th/21st century. 
End point of that process is unitary TM rights. Beginnings are in
Benelux in 1960s; EU has unitary rights—28, soon to be 27, countries—for 20
years. That’s a model for 6/7 other groupings in the world that are thinking of
replicating, e.g., in Africa, ASEAN.
Nationwide federal registration in US was unitary right in
50 states. What’s interesting is ways in which the parallel doesn’t work, which
suggests problems w/EU approach.  EU:
CTM: you can now get a single TM w/single application through Alicante in
Spain; don’t need intent to use.  Pure
registration system. Under one reading, you only need to use the mark w/in 5
years in one country and you get to keep the whole 500 million people; can get
EU wide relief by one lawsuit, instead of having to sue country by
country.  It’s a lot cheaper, and
generous on rules for registrability v. British IPO. 
Idea: facilitate trade at regional level by avoiding
problems of overlapping rights.  We have
diverse and unintegrated market in social, cultural, linguistic terms compared
to legal. Result: we might increase conflicts and clearance costs.  How best to right-size TM rights? 
Project engages w/2 debates: relationship b/t registration
and use, b/c this problem is most acute when the registration’s scope doesn’t
come close to the actual scope.  Also,
problem of clutter on the register, which motivated 2012 reform effort.  UKIPO is particularly concerned about
this.  Beebe & Fromer study question
premise of infinite supply of word marks. 
PTO reform about increased evidence of use is evidence of concern for
this issue too.
Clutter is sometimes about number of marks; Madrid Protocol
has contributed.  But clutter is also a
function of size of footprint granted. This includes geographic scope.  EU TM (no longer called CTM) occupies a very
large space b/c a single EUTM blocks national rights in all 28 countries.
Tremendous amount of dead space created.
Normative policy issues raised by current issues: What is
the nature of the EU project?  Fraught
issue right now, but we have a political project: is Europe a single market, or
a collection of markets?  How far can
politically defined territories get ahead of social and commercial patterns of
change w/o provoking judicial resistance? There has in fact been great
resistance to idea of single market, esp. by British judges. If we really want
unitary rights, there has to be more attention to the state/federal
relationship. Benelux abolished national registration when they adopted a
unitary system; US got closer to abolishing despite claims to recognize state
rights; EU hasn’t.  EU created CTM
courts, but they aren’t actually federal courts; they’re national courts
wearing a CTM hat. Commandeered by federal system, and that changes how they
think about EUTMs. 
Cases: The rule is you have to make use w/in 5 years or it’s
potentially subject to revocation. W/in national system, use has to be w/in
country. For CTM, has to be w/in EU. 
What does that mean?  Is use in
Britain still use in the EU?  That would
be useful for TM owners; takes pressure off of expansion.  Court of Justice answer (typical): it
depends.  May be sufficient, but not
necessarily. Large countries assumed that if it was used in their territory, it
was sufficient.  Rule 2: DHL case, 2011:
French and European offices had issued a registration for WebShipping for guess
what.  Where should relief be granted?  Court has int’l jurisdiction, so relief
should be available through the EU. Two exceptions: when claimant didn’t seek
relief outside the area; where there is no adverse effect by the challenged use
on the function of the mark outside an area, for example where linguistic
differences would prevent confusion. 
In last year, Sofa Works v. Sofaworkshop, involved British
pushback.  Reasoning: use in Britain
justifies inference of likely expansion through Britain. But that doesn’t
justify an inference of likely expansion to Spain.  There are lots of products that simply won’t
sell in Spain, e.g. British food. 
Therefore, use in UK will not maintain CTM. However, there was confusion
in Britain, and relief was granted for passing off.  Heavily criticized by TM offices, but it is
beginning to ask the right questions about whether it makes sense to extend a
mark to 500 million people and 23 languages when use is limited.  Another case: green e for car rental,
confusing logos. Court grants relief only in the UK.  Claimant hadn’t provided evidence of
confusion through EU, which would be really expensive to litigate.
Another example: names that are confusing to Germans, but
not confusing because of semantic differences to English speakers.  Relief could be limited to Germans, but
burden is on defendant to show that.  He
thinks that’s the right burden approach, and the right question.
If purpose is to expand trade, we should recognize that TM
is as much about social and commercial boundaries as it is about political
boundaries. You play w/existing doctrine aggressively to test the
premises.  Maybe consider Max Planck
proposal to adopt something like concurrent use (after a sufficient period of
nonexpansion by registrant). Unitary rights become less sensible, ironically,
the larger the union gets. Be more conscious about diversity in 28 countries
than 6.  If we do embrace unitary right,
then you have to really think about institutional design, b/c it’s very hard
for German judges or British judges to really think of themselves as the
generic “European consumer,” esp. if they’re not in a European court with judges
from other countries.  Would need more
empirical evidence, contra recent British rejection of surveys.
Timothy R. Holbrook, Emory University School of Law, “Boundaries,
Territoriality, and Patent Infringement Remedies”
Will the court demand clear statement of extraterritorial
enforceability?  Age of digital products
makes it more important.  ITC lacks
jurisdiction to regulate transmission of digital files across borders. But in
other cases, extraterritoriality occurs: use of a system, part of which is
outside the US, can infringe so long as the control is in the US. You can
infringe by offering to sell where the sale is contemplated to take place in
the US, even if the sale doesn’t occur and the offer occurs in Norway. Overseas
acts of inducement count if the acts of infringement are domestic.  Intent to assemble components overseas can
lead to liability. So there’s a lot of inconsistency in Fed. Cir.
jurisprudence. One area where they finally decide to draw the line, in the
wrong place, is damages: you can’t get damages from foreign sales even if there
is a predicate act of infringement in the US. 
Idea is that patent damages are compensatory and patent rights are
territorial.  Even if the infringement is
the foreseeable but-for cause of the harm, Fed. Cir. has drawn the line at
territoriality.  Courts say they don’t
care about conflicts of laws, but the cases’ reasoning involve consideration of
conflicts.
Mark A. Lemley, Stanford Law School, “Did eBay Irreparably
Injure Trademark Law”
Four-factor test from eBay:
whether and how it extends outside patent law. 
Short answer: whether or not it should, it’s going to, as 2nd
and 9th have done w/© law; 3 circuits have applied to TM; and if you
read the TM statute it looks an awful lot like the patent statute: may grant
injunctions in accordance w/ principles of equity. 
How do we apply eBay to TM cases?  Wants to suggest that policies of TM law are
and should be pretty different from patent law, and that means we ought to be
significantly more willing to grant injunctions even applying eBay, and that has actually occurred in
the cases applying eBay to TM.
Four problems w/current application to TM: (1) eBay is
intended as a flexible, case-specific test; no bright-line rules but
balancing.  That said, 9th Circuit
has said these are rules. You must show the presence of all four factors:
irreparable harm, lack of remedy at law, balance of equities, public
interest.  Second, we’ve made it really
hard to prove irreparable injury. How would you prove injury?  My consumers were confused, maybe: they
thought they were buying my product, but they were buying my competitor’s
product and they were unhappy and they blamed me. There are problems
w/that—it’s inherently hard to demonstrate actual confusion.  They might not know they’re confused if they
don’t have anything to complain about. 
[But can’t you show lost sales or lost reputation in those scenarios?
And are competitors really the standard example:]  9th Circuit says that allowing
confusion to substitute for harm would eliminate the irreparable injury
requirement b/c likely success on the merits would then demonstrate irreparable
injury. But if we take away evidence of consumer confusion, we’re tying at
least one hand behind our back.  9th
Circuit is also skeptical of reputational harm. 
You can’t simply demonstrate that loss of control is irreparable injury;
you need reputational harm evidence.  [Or
at least evidence that the D’s product is bad—as I read the cases, that’s all
the courts in the 9th Circuit are asking for.]  This is troubling esp. in combination with
the gatekeeper inquiry.  
Many people have suggested we should presume irreparable
injury; has some sympathy for that but we might not go that far. At a
minimum,  need to be more flexible about
what evidence can demonstrate actual injury.
Third, adequate remedy at law: in patent, copyright we have
robust damages regimes. If you win your case, you will get money.  Even if there is no injury from patent
infringement, b/c statute provides floor of reasonable royalty; so too in ©
w/statutory damages.  TM is very
different. Normally doesn’t award damages as a result of TM infringement;
traditional remedy was an injunction. Damages tend to be involved only when
sales diversion has been shown, or when I can show that D is a willful
infringer. In some circuits, this may be changing as a result of accident of
1999 statutory change about dilution, but still in the majority of circuits you
won’t get damages most of the time you win your TM suit. Combined with
difficulty of getting an injunction, we come to surprising conclusion that I
can win my TM suit, show confusion, and win neither damages nor an injunction.
Seems like a bad idea as a matter of law/equity and not consistent w/idea of
existence of adequate remedy at law.
Final problem: the public interest: plays a pretty small
role in most patent and © cases. There are occasional cases in which court sees
a bad idea to grant an injunction, e.g. when the patentee owns a patent on
sewage treatment and wants the city of Milwaukee to shut down the sewage
treatment plant.  That’s not a good idea.  But mostly it’s between D and P. In TM law,
if you won it’s b/c you showed that consumers were confused; a court that
denies an injunction is saying that the consumers can continue in their
confusion.  [This is why I’m ok with the
rule that Lemley is not: much of the time, these conclusions are wrong/don’t
matter to consumers.]
Return to pre-eBay
is unlikely, and there are some benefits from its application. Case by case
inquiry can help us look at difference b/t strong claim of
infringement—counterfeit or knockoff—and more extreme extensions where the
theory is that a completely unrelated product confuses consumers about some
relationship with no bearing on a purchasing decision.  eBay can
serve a positive role—weeding out unnecessary cases by weeding out the
remedies. But to do so we’ve got to apply it in a flexible, case by case way,
with a recognition that there is injury to P and to public in the core TM case.
Moderated by Shubham Mukherjee, Whirpool Corporation
Dinwoodie: both other papers ask whether there ought to be
transcendental principles across borders or across types of IP. If courts are
looking at extraterritoriality in patent in a more horizontal way, maybe the ©
cases can provide some guidance. Q what courts are really doing in eBay cases.
Lemley: not really clear b/c many courts don’t talk about
eBay. Maybe b/c haven’t thought about it, or maybe b/c they think it’s so easy
to satisfy they don’t discuss it.  When
they talk about it, a minority grant injunctions.
Dinwoodie: TRIPS bars compulsory licensing in TMs.  If denying injunction = judicially created
compulsory licensing, that might create an issue.
Lemley: no remedy isn’t the same as compulsory licensing (or
is it?).  Dinwoodie is focused on geog. expansion.
Wished you’d do more w/product expansion, which is equally important for
clutter costs.   But is anything plausible in a world where so
much is online?  I’m not directing my
product to Spain, but everyone in Spain can see it, and it will be seen
alongside the Spanish competitor and everyone else.
Dinwoodie: people have talked about the product scope
extension more than geog, but it’s an important part of clutter, particularly
in Europe b/c we don’t interrogate goods in the specification. In Europe, the
list of goods/services is 50% larger for the same mark in Europe v. USPTO.  Internet: in theory, that’s important, but
courts have become more restrained about the extent to which they’ve said that
internet use is use everywhere. Both in EU and US.
Lemley: thinking about what we tie our royalty calculation
to, and how that relates to our theory of harm or benefit. If making, using,
selling, offering to sell is infringing, then maybe anything can trigger
damages. But maybe the benefit someone gets is where they use it, not the fact that
the salesperson happens to be sitting in the US to make a foreign sale for a
use in a foreign country.  We’ve talked
about the idea of a locus of infringement, where the harm is centered; a locus
of injury or locus of benefit might help.
Holbrook: agreed.
Lemley: Dilution statute expressly says no damages unless
willfulness; hard to say there’s an adequate remedy at law without damages;
problems of proof in dilution are even harder than problems of proof in TM, b/c
whole concept of blurring involves not being injured by one instance.  This combines to suggest that even if you do
what I suggest re: eBay, we might be
granting injunctions in fewer dilution cases, but not none—the consumer
interest is nonexistent.  But no adequate
remedy at law—he’d think courts would rebel against that, though 9th
Circuit hasn’t.
McKenna: thinking about why the 9th Circuit
decided to do this—there was a pretty significant time gap b/t eBay and the adoption in TM. Something
about the brokenness of infringement doctrine—courts are increasingly skeptical
there’s any harm; courts let the skepticism arise at the remedies stage. Hard to
figure out how you talk about this without any recognition of the substantive
standard. Herb Reed itself is a weird
case where there might not be TM harm.
Lemley: Yeah, we might not love the finding of infringement
in Herb Reed or San Miguel, but doesn’t think it’s considered decisionmaking but
rather accident. Herb Reed is a
preliminary injunction case.  They then
in dictum say we should apply eBay
b/c we require irreparable harm in © case and in permanent injunction TM cases;
neither of the cited cases say what they say it says.
McKenna: if all the cases citing eBay are cases w/reservations about harm in general, that could be
the driver.
Lemley: not citing eBay
is more likely to be counterfeit, bad lawyer, default rather than choice of
cases by judge.
Arti Rai: The Court is taking cases to make transubstantive
law from the patent context where there hasn’t been percolation. Maybe
disproportionate number of patent extraterritoriality cases creates
impoverishment for the record—the district courts don’t have the opportunity to
create as rich a record. 

Holbrook: good point.

from Blogger http://ift.tt/2fS4k2r

Advertisements
This entry was posted in Uncategorized and tagged , , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s