IPSC session 1

Standard disclaimers apply: These are my
summaries, not the presentations themselves.
usual, I have to skip a lot of interesting presentations and I try to attend
things I haven’t seen, no matter how good the ones I have already seen/read
drafts of are.
1: Trademarks
George (and Lisa Larrimore Ouellette), Trademarks as Innovation Incentives
saying that the goal is/should be innovation. SCt has said multiple times that
TMs aren’t about promoting innovation or discovery; that’s patent/©.  We’re saying that this has made us overlook
the effects of TM on innovation, which could be good or bad.  Survey evidence: many innovative firms don’t
use patents at all. Pharma/chem aside, firms view first mover advantage as more
important in appropriating returns from investment.  Not concerned about lines separating
doctrines. TM is important in maintaining/extending first mover advantage and
thus creates incentives.  Purple pill for
Nexium=competitive advantage in the marketplace; the Swiffer, which used lots
of existing inventions but appropriated returns through branding.
are now using TM as innovation indicator—registrations correlate w/R&D
spending, stock market value, and self-reported innovation as well as patent
counts. There are caveats. TM registrations don’t mean 1-1 new product; could
be a product new to the firm or the marketplace rather than new to the world,
but that’s also true of patent
àinnovative product. Also
industry-dependent, but in some industries TM better correlates w/innovation
than patent, for example in info services.
doesn’t mean that more TM means more innovation.  TMs have costs to innovation, as w/patents.  Barriers to entry; higher prices to consumers.
Overincentive—TMs can endure forever.
How do
first movers exploit TMs?  At least three
mechanisms: staking out the most effective marks—Beebe & Fromer on the
marketing literature on the limited supply of “good” marks.  Causing chosen marks to become synonymous
with the innovation—arguably Lyft is a better name for ridesharing, but Uber
owns the category mentally.  Using the
first mover period to develop brand loyalty, as w/name brand drugs after patent
expiration.  Can work together: cronut is
an apt name for the hybrid pastry, and it’s a registered TM though it’s
arguably generic (and the registrant may not have been the inventor [which
seems to be a problem for the theory, as does the Swiffer example]) and
developed brand loyalty. [Isn’t this an incentive to create a thing called
brand loyalty or goodwill, not the thing that we have historically called
innovation?]  Shredded Wheat case goes to the link—protecting a name synonymous
w/product has a similar effect as patent protection post-patent
b/t patents and TM in industries w/low turnover and need for differentiation
b/c advertising spills over to similar products, like the pharma industry. [Maybe
you need TM differentiation to preserve market share in pharma precisely
because pharma depends on patent-type innovation, which is generally free for
others to copy once the patent expires?] 
But TM provide distinct benefits over patents: Cost. You don’t need
anything to get TM protection but bring product to market, and registration is
cheaper/faster than patent examination. TM cover more subjects than patent—anything
that can be sold in the market.  Quick
innovation cycles are poor fits for patent as w/software, but first mover
advantage can be significant. Less robust protection than patents, but weaker
protection over a longer period can achieve the same incentive w/less deadweight
Any full
economic analysis of given TM doctrine should take good & bad into account
when trying to measure its effects on a particular industry.  Where doctrines give wiggle room: genericide,
secondary meaning, functionality. Unclear if change is needed. Added complexity
from trying to factor in may o/w possible efficiency gain but that’s different
from believing that these effects don’t exist.
[Why not
call this theory a theory about protection against point of sale confusion or maybe
just against counterfeiting?  Current
formulation seems to be imprecise in just the way that distorts full economic
analysis.  Does dilution protection
support first movers’ incentives? 
Especially given the evidence about how most (non-pharma) firms don’t
make internal distinctions b/t IP doctrines (see also Jessica Silbey’s work),
it’s hard for me to understand how one would distinguish between “existence of
some basic TM right” and “this particular aspect of the doctrine” in performing
the economic analysis of a doctrine’s incentive effects.]
Q: this
is about what TMs do to compete/bring a product to market, not innovation. What
is it about TM law that is stimulation innovative activities as opposed to
bringing a product to market? Also: Don’t really get how registration is an
innovation indicator. From economic perspective there’s such a low cost that it’s
not a great signal. Innovation correlates w/ a lot of stuff like not being
A: Rewards
a number of different activities, but mechanisms affect first mover advantage
in a lot of ways.  One could argue that
first mover advantage is the key thing, and TM extends that.  Causes TM to have more direct effect on
innovation.  Also true that correlation
isn’t causation.  Don’t rely on those
Christian Helmers
(with Carsten Fink, Andrea Fosfuri, and Amanda Myers​), Submarine Trademarks
iPhone mark
originally filed in Trinidad & Tobago on paper March 2006, by a company
called Ocean Telecom that eventually merged w/Apple.  Filed USPTO by Ocean Telecom Sept. 2006 for
extension from T&T.  Official
announcement by Apple Jan. 2007.  Released
June 2007; merger w/Ocean Telecom Sept. 2007. This reflects the submarine
strategy: public disclosure is strategically delayed by filing in a foreign
jurisdiction w/o online publication and sometimes combined w/use of shell
companies. That can then be used to get US priority when filed w/in 6 months
under the Paris Convention.
Small but increasing
number of mostly tech firms. Used PTO TM dataset to ID TMs 2002-2016 claiming
priority from one of 6 jurisdictions that are Paris Convention but don’t
publish online register. Also extracted non-submarine filings from companies
that use the submarine strategy.  187
unique company names doing submarine filings. Also distinguish filed in own
name/filed by shell company; our prediction is the upward trend of filings will
continue to increase.  Apple, Google,
Zynga, Mattel, T-Mobile, Cisco, Amazon, LG, Bethesda Softworks, Intel, Beats
Electronics, Facebook, Instagrams, Nest Labs, Tivo.  Amazon stands out w/shell company filing
strategy, but Apple has done it more numerically so far.  Strong trend: class 41, 42 (computer &
entertainment services), goods class 9 (computers): usually filed in products &
services.  Mattel stands out here as toy
company, but has used the strategy for online characters.
Used Google Trends:
are submarine TMs associated w/fewer online searches prior to official product
announcement/release?  Answer: yes. iPad
Air, for example, had zero search intensity until official announcement; the USPTO
filing date was after the official product announcement. Compared to regular
TMs: the regular marks have much higher search intensity before the
announcement date.
Thus submarine TMs do
seem to be associated w/more secrecy than regular TMs. More likely to use when
TM/product is more valuable; competition for products/names is intense; company
pursues a global branding strategy. Various metrics, including: Where you tend
to have a lot of refusals and oppositions, companies are more likely to go
submarine.  Madrid filing/Madrid filing
in China (indicating a global strategy) is positively associated w/submarines
b/c they’re worried about squatting in China.
Hemel (and Lisa Larrimore Ouellette), Governing the Semantic Commons
Semantic space is
elastic, but not infinitely or effortlessly so. English speaking consumers can
be trained to remember marks like Krasny Oktyabr, but it’s a cognitive stretch.
Example: Hagen Dasz.  Tragedy of the
semantic commons include costs of proximity: costs arising b/c marks are too close
semantically to one another include consumer confusion, reduced incentives to
innovate/invest in quality.  Distance
also leads to confusion: medication with name too long for expanded Twitter
count makes it hard to identify the medication or to figure out what’s the
same/different—leads to greater reliance on gatekeepers and greater start-up
search costs.  Compare: last French/Italian
wine you drank—what was the mark, not the varietal? For non-connoisseurs, it’s
hard to remember and we become reliant on people who restrict market access.
Trouble w/TM is not
just that semantic space is limited, it’s also that almost any change to TM law
that reduces the costs of distance will increase the cost of proximity, and
vice versa.  This tradeoff is almost
inevitable. Consider geog. limits on TM protection, or higher showing of
secondary meaning before recognizing a descriptive term as a mark: that
increases ability to approach the other use, but also risks confusion for the
people who do cross over geog. lines or who do think there’s a single source.
3 possible escapes
from the dilemma: propertization. TMs are relatively weak property rights;
assignment in gross doctrine limits alienability/divisibility, making semantic
space heavily zoned—you can’t just do whatever you want w/your property. We
could remove the zoning and allow property owners to allocate regardless of actual
consumer protection, so the single owner could decide, or not, to allow one
user in California and one in Iowa, or one user in one category of beer and
another user in another category. Demsetzian logic: trust the mark owner.  Trouble is the Merrill/Smith argument about
slicing property.  Other marks lose
information value when you do this.  You
can’t then look at any TM and understand what it represents, and the property
owner doesn’t take that externality into account when making decisions for its
own benefit.
Could use Pigouvian
tax, or subsidize firms that expand the semantic commons.  Target tax benefit for advertising to those
who call their product “Smirnoff” instead of “Natural Light.” 
Alternative ID
systems: government generated, like SSNs, or bar codes (privately generated) so
that you don’t have to remember what you drank before and can just scan the bar
code.  There is need for coordination,
whether by gov’t or by private systems. 
Some health systems use 10-digit identifiers and others use 11-digit,
and not all transfer the 10 to 11 in the same way, which is a problem of semantic
space but not generally thought of as a TM problem. 
Q: is propertization
sensible given the confusion results?
A: We know that land
is finite and we’ve still given strong property rights.

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