A Celebration of the Work of Wendy Gordon, part 2

Harmless
Free Riding
 
by Wendy Gordon, Boston
University School of Law

 (Additional related drafts from Wendy: Time
and Intellectual Property After Coase
and Proximate
Cause in the Law of Copyright: Linking Liability to Incentives
)
Common law imposes penalties on those who
harm much more readily than it requires people to avoid benefiting without
payment; very few duties to help and lots of duties not to harm.  Foregone benefits don’t receive the same
weight as harm done—which means that “do no harm” is not the same thing as “maximize
wellbeing.”  Special deference to harm
may be hardwired. We’re more “rational” when computing potential benefits.
When it comes to IP, this common law
preference seems largely eliminated b/c most IP is about increasing
productivity, rewarding beneficial behavior rather than penalizing risky
behavior. Damages include lost sales but also lost licensing fees—internalizing
lost benefits.  Don’t require harm to be
proven. Particularly notable in TM: “if value, then right.”  Expansion in © liability too—now, for
example, no economic motivation is required for criminal infringement.
What is “harm”?  Add up everything that people have rightfully
(e.g., exclude stolen goods; removing those doesn’t cause harm), including
things that they might not have a “right” to but do benefit from.  To harm is to cause a setback to a rightful
interest. There should be a presumptive liberty to act in a way that’s not harmful,
though that presumption can be overridden (and I think she also endorses vice
versa: there should be a rebuttable presumption against causing harm).  Right wing libertarians think that only
physical harm matters and only harms to people with entitlements to property
matter, but she considers more kinds of harm relevant.
Foreseeability is a big issue with
harm.  The clearest harm is diversion of
current customers; the next version is copying but making money in a market you’re
willing to exploit; least likely is where someone reaches a market you couldn’t
have exploited or even licensed given privacy/transactional concerns.
Ultimately: thinks you have a weak obligation
to pay for benefits you’ve received as long as you’re not made worse off (can
pay out of the benefits you received), an obligation that can be overridden by
other sufficient concerns.
Why do judges not care about harm? One
reason might be that anyone else’s benefit—harmless free riding—is a source of
inequality or envy.  Maybe envy is
legally important because envy is a big driver of capitalism, for good and ill.
Maybe judges ignore harm/benefit because they think of IP as a benefit-based field
so all the usual constraints are off. Maybe judges don’t like free riding
because it’s a threat to democracy when it means people don’t vote or don’t pay
their taxes. 
It would be hard to persuade courts to tolerate
harmless free riding, but we should try, and that will be easier if we
understand why courts don’t like it.
Commentary by Rochelle
Dreyfuss, NYU School of Law & Fred Yen, Boston College Law School
Dreyfuss: T-shirt cases:
there is a premium for a T-shirt with a team name on it.  The surplus has to go somewhere, and the
judge sees the team v. the guy selling the t-shirt and it’s not a surprise that
the judge chooses the team. The court doesn’t see the guy as standing in for
the public and the surplus being dissipated into the public.  Courts don’t like institutional litigation
b/c they think they’re distorting—school busing, for example, pits particular
groups against each other—but they don’t notice that IP cases are institutional
litigation.  Courts can’t tell that
surplus is being diverted from the public; they can’t tell whether the price is
competitive, which would require several different producers competing to sell
team t-shirts.  The same is true
w/failure to appreciate the public domain, which looks like the place stuff
goes to die. 
Need to vividly expose the
courts to the public for whom the D stands, though that didn’t work w/composers
etc in Golan and Eldred.  Patent cases:
laws of nature aren’t patentable even if we know who discovered them—the benefit
to the public is a cost to the creator.  Breyer
gave an ode to the public domain: patents can discourage research, force people
to avoid potentially good ideas. His concern about follow on invention hasn’t
fully extended to other forms of IP. Why? Amicus briefing? Greater obviousness
that progress depends in tech on using the work of others? Is romantic
authorship an easier sell than heroic inventorship? Does patent’s other
requirements (shorter term, examination, public disclosure) emphasize the public
interest? Is the lure of new stuff enough to get judges to tolerate free
riding?
Adverserial distortions
could be minimized if potential users intervened, but we don’t observe that
kind of intervention. If D wins, others will win anyway (nonmutual estoppel) so
why bother?  That free riding is
tolerated—why do courts allow it? 
Yen: Foreseeability is a
real challenge when one wants to use negligence and similar concepts. It’s not
a static concept in tort; it runs on a dynamic world in which things become
foreseeable. If it happened, it can seem foreseeable that it would and will in
the future happen.
What if we took “if value,
then right” as seriously as possible? 
Consider the ultimatum game. You must make a proposal to split; if you
offer too little and the other person says no, you both get nothing. The
rational amount to offer is a penny, but you can’t do that. Empirically, it’s
closer to 30-40%.  There’s a connection
here to a windfall from a potentially valuable unforeseen use of IP.  Suggests that society is in fact comfortable
w/idea of windfall benefits but we would rather forego them unless there’s some
sharing of the windfall in some way.  Could
apply to the secondary user but also could apply to the people who end up
owning valuable IP.
Envy but also respect is at
issue.  A reasonable offer is a sign of
respect. [I’m thinking of the work showing variations in the ultimatum game
based both on demographics and on perceived desert through specific performance
on a task.]
If we give rights every time
there is value in a litigation, then we don’t necessarily correct a
distributional wrong, because we’ve never asked the P whether she paid off all
the people she borrowed from (though we may come closer in patent with
examination etc.).  We could even let Ds
seek offsets.
Gordon: patent law is not
necessarily about corrective justice: since copying isn’t required, patent
doesn’t trigger the idea of but-for contact w/P’s work, D’s work would’ve
looked different.  That’s another thing
that may protect patent from the dynamic she identifies more than ©.  Once causation is involved, it is vulnerable
to expansion of what counts as causation.
Loren: narrative also
matters: the expectation that things that are valuable must be owned. [But see
things like the ability to read: processes or behaviors are often not subjected
to the same logic.] Judges see themselves as authors; the © pull is stronger in
that they’re less likely to be inventors.
Bone: Custom may also have a
strong normative pull. Don’t need a harm/benefit distinction.
Hughes: idea of gleaning/leaving
for gleaners (from Bible; appears in paper) is a double edged sword. In the
tradition, it’s not inconsistent with ownership—ownership is required
before you can have a duty or injunction to share with others.
12:00pm   Acquired
Functionality
 
by Pam SamuelsonBerkeley Law
At the heart of her work: functionality is almost as difficult as
harm.  Gordon, in How
Oracle
Erred, deals
w/functionality as limit on ©.  Gordon
drew on Baker v. Selden’s explanation/use distinction. Copyright protects explanations;
need a patent to control uses.  Oracle
isn’t complaining about books that reproduce & explain the Java API, only
about use of parts of the API to enable Google & Java programmers to write
code. API is a tool for creation of new works of authorship—it is functional—and
© should enable rather than forbid it. Likewise, Lotus wasn’t going after
people using the command hierarchy in books about Lotus 123; it was going after
competitors using the command hierarchy for functional purposes to enable interoperability
so consumers could continue to enjoy the benefits of their investments in
macros.
Pure Baker: © is never available for functional designs. Congress
created two exceptions: software & architecture—but still recognized that
functionality limits the
scope of © protection in such works.  But what does functionality as a limit mean? Functionality
can come from merger over time as users make investments in using a program.
There’s more than one lens to look at Lotus.
There are many things born functional; channeled to
patent/trade secrecy. After Star Athletica there’s less channeling, but still:
if they’re inextricable from intrinsic utilitarian function, they’re not ©able.  Most ornamental designs
for (as opposed to designs on) articles of manufacture in design patents would fail this
test (or be too abstract to protect, as w/the beveled edge).  Various scope rules serve as functionality
limits: bookkeeping forms, temperature recording charts, designs depicted in
drawings not giving the © owner of the drawing any rights in making the design
as depicted.
Indicia of functionality from case law: mechanically
derived; dictated by function; systematic or methodical organization; necessary
to objective or task; conformance to rules, logic; efficient design; incidental
to carrying out tasks or processes (ABA claimed © in bank transfer numbers);
constrained by health/safety concerns (SmithKline case about drug instructions
where the generic drug was FDA required to use the same language on the label as
the non-generic version; Bikram Yoga); Industry standard; affecting cost,
quality, or effectiveness of design (trademark: Traffix). Fed. Cir. has a
terrible functionality rule for design patents and used to have the same rule
in trademark.  Some cases do recognize
merger of function & expression in software: necessary for interoperability
in game platform, accepted by Fed. Cir. 
This is true even though the first programmer had choices about how to
create the game in the first place. It was a constraint on games that wanted to
interoperate: the merger occurred after the firstcomer’s choices.  Lexmark: had choices about printer software
for cartridges, but Static’s chips couldn’t operate in the cartridges without
the Lexmark code.  That is merger over
time.  CONTU report recognized this issue
as well.
Other examples of acquired functionality: Veeck v. Southern
Building Code: once the city adopts a building code, the choices go to zero;
there is no other way to express what the law is, so posting the code is noninfringing
on merger grounds.  SmithKline: FDA
approved wording, similar result. 
Beck/Merritt Forbes—jury could decide that contract language/bond document
was functional: if you want limitation on liability to work, it has to be
written in a specific way, especially if a court has approved the language.
Merger is one of the relevant doctrines but functionality is a useful label.
Could we be more precise about distinguishing expressive
creativity and functional creativity, the latter of which should be channeled into
patent/trade secret?  We can look at
synonyms for expressiveness and functional creativity.  CAFC has to be wrong in saying functionality
requires that there be no other way to do the thing, because utility patents
routinely identify prior art ways of performing the same function.
Also occurs in trademark law: Inwood Labs.  Initially the colors of drugs may have been
arbitrary/nonfunctional, but over time they assist patients in identifying medications
and reducing anxiety over a switch to generic alternatives; useful to
pharmacists in sorting drugs to fill prescriptions.
Gordon
wrote about restitutionary impulses that create risks of overprotection,
witness CAFC’s idea that Google just has to be made to pay for its use of the
API. Free riding can be a good thing: 9 million Java programmers have invested
in learning that API and created millions of programs that run on Android and
other Java platforms. The Lockean proviso should limit IP rights: “enough and
as good” must be available to subsequent creators; Sun promulgated the Java API
to be widely used and endorsed distinction between no-© interfaces and ©
protectable implementations. When intellectual creations become standards, the
public’s interest overrides the initial creator’s interests.

Commentary by Rebecca Tushnet, Harvard Law School
I
assume I was asked to comment right before lunch because I talk fast.  Also perhaps because I have notes for a paper
that has the exact same title as Samuelson’s, except my paper was going to be
about trademark. And this amusing coincidence signals something important about
the topic: it is about channeling between different IP doctrines. Functionality
is our most well articulated (which doesn’t mean well implemented) channeling
doctrine, and it is important across the areas of ©, TM, design patent, and
utility patent.  Samuelson asks us to
distinguish between expressive and functional creativity as a way to
distinguish the distinctive subject matters of copyright and patent
respectively, which might also help us think about different types of
functionality in TM.
Functionality
as a matter of necessity: link should make us think of various fair use tests
that sometimes frame the issue as whether the defendant took more than was
necessary, both in © and TM.  I’ve been a
critic of the tendency to shove all tough issues into fair use, but the
correspondences signal the presence of a pattern that needs to be handled by
some protective doctrine: functionality as a separate doctrine focuses us on
the desirability of channeling a claim into a specific IP regime, while a fair
use defense in TM or © holds out the prospect of overlapping rights in the
subject matter at issue in at least slightly different circumstances.
Lexmark
poem hypothetical is the perfect example of necessity derived from previous
unnecessary choices: the poem didn’t need to be the password that opened a
lock, but having become so, the claimant’s own choices rendered the defendant’s
necessary. Ties into Gordon’s important work on how some copyrighted works can
change the communicative environment enough that a subsequent creator feels
compelled to respond. That is, the Lockean proviso about having as much and as
good left over is applied to a dynamic world, in which what’s left over changes
depending on what the author created.
Implications
for TM? TM already recognizes acquired genericity—a term like aspirin can enter
the public domain as the name of a kind of thing, rather than a brand name,
when the public uses it as the name of the thing.  Genericity and functionality are very similar
and perhaps identical ideas: some things are preserved for public use even if
that means some rump amount of confusion among people who think they’re
privately owned.  Acquired functionality
would be no different from this kind of genericity.
Samuelson’s
work shows us that neither expressive nor functional creativity should be
protected by TM, since both © and patent are separate regimes with different
demands and constraints.  Specifically:
With Betty Boop in the public domain, the creativity involved shouldn’t itself
be allowed to serve as a source identifier for things on which Betty Boop
appears—we see this handled various ways in the case law, from using Dastar to
nominative fair use to the idea of aesthetic functionality to the idea that a
song can’t serve as a trademark for itself but rather would have to represent
some separate product or service in order to be a valid mark.  TM is going to confront this more often as
well-known works resume entering the public domain. 
Expired
© as one example of acquired functionality in TM; Terracycle in recycled Coke bottles
is another: it’s functional because Coke comes in bottles of a certain shape,
but it doesn’t have to be that way in alternate universes with the same rules
of physics and even the same humans that we have here.
Functionality
requires us to ask questions about timing. 
Not all of Samuelson’s examples of functionality in TM are acquired over
time—maybe better to say result of conscious decision: Inwood v. Ives, the
functionality of a known capsule color is definitely acquired; the black motor
that looks smaller because it’s black (Brunswick v. British Seagull (Fed Cir
1994)) isn’t acquired functionality in the same sense: it’s functional
because of larger patterns of human perception which were known or knowable
before the trade dress was initially adopted. Hot pink just couldn’t have
served the same function if the original producer had chosen that color
instead, whereas the Inwood colors were chosen initially with a fair amount of
freedom. Justin Hughes has offered an interesting idea of aesthetic
functionality that depends on whether a consumer preference preexists the
development of the challenged design. His idea of functionality would encompass
the black motor but not, without some further tweaking, the Inwood v. Ives
capsule color for that reason.  Hughes
adds in the idea that matching can be functional—a larger preference for things
that match can justify finding certain kinds of designs, mainly but not always
color, functional, at least as applied to durable goods. You need more than that
to get Inwood v. Ives capsule color functionality, because pills aren’t durable
goods, and a general human preference for consistency might not be hugely
helpful in distinguishing the shape of the Coke bottle from the color of a
pill.  And yet it seems hard to deny
evidence that consistent pill color and shape improves medication compliance as
relevant to the functionality of pill color and shape for generic versions of
name brand medicine.
Broader
question about Counterfactual reasoning: what are you allowed to change about
the world in order to assess whether other choices were possible for the
defendant?  Maybe not decisions of third
parties like Boeing or a golf association that makes the rules for what
equipment has to be shaped like. SmithKline/Drug labeling: FDA rules that
mandate the adoption of identical language: a rule operating on all parties
regardless of what choices were initially available before the P entered the
market. Counterfactual moment as when the D seeks to enter the market because
it’s the D’s conduct that interests us and that raises questions of harm and
benefit.
Vetter:
under this analysis, would translation into Braille for nonsighted access count
as acquired functionality?
Samuelson:
imagined it as using something exactly; adaptation is worth thinking
about.  Are all things that constrain
aesthetic choices functional? Not ready to say that, but the more constraining,
the more likely it is to be functional.
Lunney:
should functional mean the same thing across different areas of IP?  Utility patent has a different history than
PGS works in ©.  Disagrees with RT that
genericity is for words and functionality for symbols—the words Merry Christmas
on a ribbon aren’t generic, they’re functional. [I guess I’d say that there is
no difference in meaning or implications for TM law as between the two terms of
art except that one is usually applied to words and occasionally symbols while
the other is applied to trade dress/design, and to the extent that there is
differential legal treatment of generic v. functional I don’t think there
should be.]
Gordon:
something can be both a fact and functional (that is, the content of the
law). 
Samuelson:
happy to say it’s merger, but calling the law a “fact” isn’t persuasive to a
lot of people.

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