Trademark Scholars Roundtable, Stanford part 2

Session 2: A Forward-Looking Perspective  
To what extent should trademark or unfair competition law
reflect consumer expectations or seek to shape or set them?
Introduction: Rebecca Tushnet
One consideration in how we should structure the regime is
that casual empiricism is a pervasive and possibly unsolvable problem because
courts don’t notice when they’re making empirical claims: SCt cases (even in
Tam, on registration as endorsement). Necessary for PTO given volume: TMEP
assumptions about functioning as a mark. Heymann: it is indisputably true, as
Graeme Dinwoodie has noted (What Linguistics Can Do for Trademark Law), that
trademark law must of necessity take certain shortcuts to ensure that
litigation does not devolve into a morass of evidentiary issues; true, too,
that in a field (law) that depends on precedent for efficient private ordering,
there must be certain general rules that can be derived and followed.
So at the outset we should just work on clarifying our
understanding of to what extent empirical claims are truly our best guesses
about a wide range of consumers and to what extent they are normative claims
about how reasonable consumers should act. Cost benefit analysis &
consideration of error costs have a role to play in our legal tests: what if
we’re wrong about the empirics, how easily can consumers/competition recover
from our error?  See this in Qualitex and
a bit in Wal-Mart—if we’re wrong about distinctiveness, producers will usually
have discrete symbols they can use instead to identify source.  Potential justification for “limping marks”
concept as well.
One thing we don’t know yet in law is how consumers learn in
response to broad market changes—while a flood of counterfeits seems likely to
change consumers’ reliance on branding alone, what pathways are amenable to
change and what will remain persistently confused? Much research suggests that demographic
characteristics are far more important to consumers’ orientation towards belief
than any particular thing they see in the market. [Possiblity of consumer intuitions
about right and wrong/free riding, as with promotional goods, encouraging
beliefs about the factual state of the world? Motivated cognition—though the
research suggests that many more consumers think copying is unfair than think
that the trademark owner definitely produced promotional goods.]
But: What messes us up is not what we don’t know, it’s the
stuff that we know that just ain’t so: consider dilution and Sprigman et al.’s
work about how it’s the surprise that causes people to hesitate—there’s no
connection w/ a particular brand, so the response that we see when people
confront supposedly diluting marks is not the brand-specific mechanism that we
thought that it was.
Many claims made in the reading were (perhaps
unsurprisingly) persuasive to me, but striking how little empirical basis there
is for so many of them: For example, The Constructive Role of Confusion in
Trademark, Alfred C. Yen, makes a great point: our theory of secondary meaning
requires consumer learning over time: initial impression is supposedly
descriptive, later learning is that the mark source-indicating. The consumer is
not necessarily mistaken either time, but responding to market. If that’s what
really happens, which we have some reason to doubt!  We all cite the Lee et al study on
identifying terms as trademarks by their placement on the package, but what
about replicability? That study tells us something that seems intuitively
powerful, but how far does it extend? Can it tell us anything about images,
fonts, slogans?  In the state of
empirical uncertainty, do we have any choice but to use our own intuitions as
the model of reasonable consumers’ reactions?
Here’s a hypothesis: Maybe our big doctrines seek to shape
producer behavior and only indirectly affect consumer expectations, and maybe
that is exactly where we should focus. Examples. (1) Genericity/functionality: we
tell producers that they need to develop a signifier that is nonfunctional and
not the only thing to call they product. (2) Abercrombie: producers should choose
an inherently distinctive term for greater certainty. (3) Free speech limits:
don’t bother to try to control certain kinds of speech/convince consumers that
your authorization is required because we won’t enforce that.  That might be an approach we could be more
confident would actually work than trying to shape consumer expectations
because producers are somewhat more likely to change behavior in direct
response to legal rules.
Consider also the
example of private label goods imitating house brands. Several early cases found
infringement by house brands that imitated national brands; Yen’s article says
that opinions now “generally” state that consumers are not confused because
they have learned from prior experience to distinguish private-label goods from
their name-brand referents, and I think he reflects the consensus position on
this. Which is notable, because, in fact, there are only two significant cases blessing
the practice, and one of those cases found infringement by one of the house
brands. Yen says consumers learned; Dinwoodie says the same: “consumers in the
United States have clearly become accustomed to private label practices in
supermarkets. Beside every branded product, there is a store brand lookalike, labeled
with the house brand. As a result, following evolving social understandings
about marks in such settings, courts have cut back on the ability of large
brand owners to prevent the sale of competing store-branded look-alikes.” But
was it truly “as a result”?
Why did sellers
persist in this technique given the early losses (not to mention the fact that
you can’t do it in many other countries)? Talked to May Department Stores’
lawyer.  In general: Copy testing was not
part of the process for approving the labeling of a house brand.  Stores took the risk despite initial
unfavorable precedents, similar to search engine advertising, presumably
because it was likely to prove very profitable if successful, and also because
they believed they could successfully distinguish the products from the national
brands in consumers’ minds. (Also, some sources suggest, because they believed
that most retailers would be too nervous about disrupting relationships to
challenge the practice.) Courts eventually accepted that they were right—though
notably without too much empirical evidence; note casual empiricism also on
display in Conopco and Food Lion cases.
If stores successfully
bet on courts’ acceptance of consumers’ ability to distinguish, suggests more consumer
perception invariance than we might have assumed—at least w/r/t things
consumers already care about. Compare to the TM forfeiture cases allowing universities
to reclaim control despite hundreds of years of nonenforcement: consumers can stay
stubborn in making associations (or not making them, in the case of house
brands), regardless of whether we think they are confused about
something relevant. 
Possible responses:
(1) commit to real engagement w/ marketing literature; (2) commit to telling
producers what we want them to do; (3) commit to normative vision of
consumer glancingly informed by empirical intuitions; (4) overarchingly, talk
explicitly about which of those paths is important and when. Normative vision
may be particularly important for competition/free speech concerns.  But it’s also worth asking claimants like the
CYOA plaintiff and the Honey Badger plaintiff to prove up their claims with
real empirical evidence rather than relying on proxies, given that there is no
history of clear consumer reliance on content of speech to make decisions about
whether trademark owners sponsored that speech. I really don’t like the
false/misleading distinction in advertising law but there is a point to
requiring surveys sometimes as a way of managing courts’ epistemological
Jeanne Fromer: Relying
on empirical evidence requires answering prior empirical questions: what we
want to ask for as evidence of “confusion.” Which answers matter? TM as encouraging
businesses to follow certain rules makes sense but we have to be clear about
the normative goals so our empirics match up to them.
Two different roles:
Empirical evidence can help us establish standards and rules and then there are
the further empirics we would want in individual cases. Surveys, testimony,
observing online behavior are all different sources of empirical evidence:
searches originating on Amazon v. searches originating on Google.
How do we get there?
Consumer construct. What kinds of confused consumer count? Hasn’t been empirically
grounded at all.
Distinctiveness: how
grounded in consumer perception do we want to be? Should we require secondary
meaning before protecting anything at all? Any well resourced business will be
able to generate secondary meaning, while new entrants will find it harder. That
perspective’s not anti-empirical but it’s differently empirical: TM law
should encourage entrants to choose specific types of marks; we could do a
better job of encouraging choice of truly inherently distinctive marks.
Law might become
less stable and more fact intensive if we did all this given that marketplaces
are dynamic. Changing meaning of words.  Consumer
behavior changes over time. Do platforms change the roles of TMs? NYT story on
unpronounceable marks on Amazon.
One story: everything else is taken; another: trademark semantic content is no
longer as important. Fromer thinks one reason is to take advantage of lack of
memory: the seller can easily disappear from Amazon and loses nothing by doing
so/switching names. Empirics will make law less stable as we have to reevaluate
what consumers are doing.

Discussant: Jake Linford: how to measure consumer
expectations? One possibility: corpora. Harder to game than 3d party surveys? Could
we measure fame by looking for a certain amount of use/a certain frequency? You’d
have to hire real empiricists to do it right, not just ask the court to do it
itself. Constitutional interpretation folks are trying to convince judges to
run with it on their own. No strong commitment to whether this is a good idea
or not. Online surveys are getting cheaper; ATurk surveys are at this point no
worse than other surveys; survey as a costly screen may not stay true for a
Robert Burrell: Consider In ‘n Out Burger: they sell an Animal
Style burger. Defendant in Australia started Down ‘n Out Burger w/ a red and
yellow arrow pointing down. Marketing played off of In ‘n Out: “Also sell
animal style for those of you who want a heart attack on a plate.” Pretty clear
that there was no likely confusion; P scoured the internet for evidence of
confusion and the most it could find was 7 posts, one ambiguous; another one said
“these are pretty close to In ‘n Out” which was strong evidence of no
confusion; in 2019 the most recent was 2016. Nevertheless the court found infringement.
Why? Court rolled out the idea that confusion can arise when consumers assume a
licensing arrangement. Second, court said no high number was required; a few was
sufficient. Third, burgers are cheap and people pay little attention. Fourth,
imperfect recollection means consumers may misremember the mark. Finally: we
must remember that we’re dealing with a registered trademark. The fact that circumstances
might mitigate against confusion didn’t matter. Seems that if we want to do
better than that, there are a number of things we need to do.
First, the rules that have emerged about how you compare
marks for similarity: although it’s supposedly factual, there are rules, e.g.,
pay attention to the start of words; mechanistic applications should be
unpacked. Have to accept that w/in the context of registration, reining TM in
will require embracing double identity, accepting the core property style
protection where we don’t pretend it’s about confusion. Also, talking about
confusion instead of talking about harm is a problem: In ‘n Out has no prospect
of opening in Australia any time soon. Registered since 1990s, but only one pop
up per year; sold 938 burgers in 7 years.  If we had a real nonuse doctrine, this would
have been cancelled. Can’t talk about these issues in isolation. Lost context
of consumer response: why are we keeping marks on the register?
McKenna: what default do we have in the absence of empirical
evidence? Law is full of assumptions from circumstantial evidence/proxies.
Whose burden is it to displace the things baked into the law? More generally,
what counts as empirical evidence? Courts rely on proxies for all kinds of elements
of a TM case: secondary meaning; likely confusion. Mechanisms about which parts
of marks to focus on may or may not be empirical. So we could ask whether these
proxies do approximate empirical judgments. The proxies for secondary meaning
are really weak. Also possible that these are not proxies, but actually just
decisionmaking guides not attempting to get at empirical reality, in part b/c
of the instability that would be introduced into the law if it really did
respond to consumer behavior. Could we do better at the wholesale level to make
these proxies correspond to what they say they represent, or should we be
explicit about our desire not to do that? Abercrombie: for
arbitrary/suggestive, we could just say we’re not making assumptions about
source designation but rather about competitive need.
Dinwoodie: Notable that there are few reported decisions
about trade dress, but how do we prove what actually happened in the market?
Not a slew of decisions but nonenforcement in the wake of Conopco. Enforcers,
juries, private ordering mediate between consumers and their understanding. Maybe
rules about the penalties for bringing/not bringing lawsuits may have to be
rejiggered to give them the right incentives.
Sheff: Fromer’s point about well resourced firms being able
to buy the proxies for secondary meaning: seems like this is by design.
Producers are content to undertake the costs of search as long as they got the
opportunity to persuade consumers. Has argued that producers take advantage of
cognitive bias. The law is designed to reflect those biases, even if not
rational. Trusts consumers to find what they want, in a nonrational way; give
producers an incentive to set up a market for works for those consumers.
Grynberg: what does it mean that there are weak marks on Amazon?
Possible offloading search to platforms. TM work is being done by “Amazon” but
the marks there are weak, suggesting that something is going on w/TM value. [He
says related to doctrine that allows Amazon to use TMs in search, but it may
not be since these seems designed to surface particular sellers when there’s a
search on generic terms.] Even if we were to declare the marks on Amazon not
marks for failure to function, that wouldn’t change how Amazon works. It’s no
longer a TM problem and now a consumer protection problem. Note that Amazon’s control takes some influence away from
TM owners but concentrates it in ways that may be a separate problem [and that’s
also true of complaints about house brands.]
Focusing on influencing sellers is not in tension with
having a normative ideal of the consumer—that normative conception is one way the
law has to tell sellers what to do.
Dogan: In ‘n Out is using confusion as a mask for fairness.
If we’re thinking about empirical support for features of TM analysis, this is
where we need empirical support for the countervailing values. Make salient the
effects of not respecting the competing values. Studies by medical researchers
showing that especially elderly people rely on color and shape to take medications:
that is valuable in not just talking about the values but demonstrating the value
to consumers of restricting TM rights in particular ways.
Burrell: Australia is willing to recognize that consumers
will more readily perceive differences when marks are stronger, so it was
important for In ‘n Out not to argue that it was a well known brand.
RT: just starting to work on house brands but interesting
that I haven’t yet found empirical work on copycat house brands as such until
after 1995. Before: brand names, other determinants of confusion. After:
increasing interest in the marketing literature. Can’t (currently) reject the
hypothesis that consumers were never confused; if that was true, there was not
really a learning period.
Litman: even after 1995 there were cases that were filed but
not litigated when the D changed the label. 
Some casual empirical evidence that consumer perceptions changed; when
she used to show lookalike trade dress to students, they used to say “how is
that possible?” [though it may be relevant that unfairness is one reaction and
confusion is another] and now they say “that’s a house brand.” This was the
first year that they were unanimous that it wasn’t confusing. The trend over
30-40 years has been pretty steady.
Nonsense brands on Amazon are doing the same work as old
style house brand in pre 1995 US—no one remembered the house brand/paid
attention to it, it was just the brand that was in Safeway or Kroger or
whatever. They weren’t exactly TMs that failed to function, but they did
indicate “this is made by the company that makes stuff for this store.”
Lemley: market structure expectations is what we’re really
talking about. Should TM seek to preserve existing markets? Should we allow new
forms of competition enabled by actors like Amazon?  Suppose the claim is: by having a “store” page
on Amazon, that creates the impression that it is authorized by the manufacturer.
Consumers may not have a well formed set of opinions about a new process that
hasn’t existed before, which might also be true of house brands. TM has to, in
that case, serve as a norm entrepreneur one way or another as it reacts to
these new forays. Doesn’t mean it can’t change in one direction or another, but
the trend he’s seen is to impermissibility. 
Could mean that survey evidence is more useful when
consumers have experience w/something than when they don’t. Keyword cases:
consumers understood that this was a search result, but were deeply confused
about whether it’s an ad or not. [They’re still confused about that!] He thinks
consumers got better and better about IDing ads and Google responded by making
it harder to tell the difference. Broader point: more reliable evidence when we
have experience with a thing.
Silbey: picking winners in an uncertain situation: we can
talk about what the default rule should be.
McKenna: many of us have told the story that consumers
adapted to private label goods; another possibility is that consumers had no
expectations one way or another and they would have adapted to whatever the
rule turned out to be. Proxies: had we relied on ordinary proxies like
similarity of marks, we might have decided to bar the practice as confusing;
sometimes in new circumstances the proxies are especially bad and we should be
more suspicious of how well they track.  [A
really good example of this is the constant use of the Twitter, FB, Instagram etc.
logos and fonts by various people. Traditional nominative fair use doctrine
would tell us that the logos/fonts convert the uses from fair to confusing, but
no one would be confused about whether Twitter endorsed your local hot dog
Mid-Point Discussants: Bob Bone: Which side should you err
on if uncertain about empirics in a given case? Depends on whether you think
there are good alternatives with same benefits for D; maybe on whether there is
harm to P, which there often might not be.
Incentives are central to law. We design rules to affect ex
ante incentives in contracts, torts, etc. Why not in TM? Maybe they’re not an
effective target because of heterogeneity, changeability, etc. Is it easier to affect
producers? Maybe they’re more homogenous, stable, but that’s questionable too,
though relative to consumers that’s plausible. A moral framework would be a
different matter. But given that goodwill is itself dynamic and changeable, how
can/should a moral analysis take into account that goodwill might shrink in the
future anyway for other reasons?
Jessica Litman: fertile ground to nudge law is found in marketing
literature—we don’t need to do all the empirical research ourselves.  Also, focusing on the harm is another way
into this question of what the wrong is, if there is any. Nature of incumbency:
upstarts lack clout, almost by definition. They can’t get Congress or INTA on
their side. Big successful upstarts can’t stand in for the new ones; we can’t
either b/c we can’t necessarily imagine who they are. It’s a limit on our
ability to advocate for flexible markets.
Secondary meaning: suggests difficulty with
empirical evidence. It’s possible for generic terms to have secondary meaning,
and if we’re committed to the policy justification for genericity then we
shouldn’t rely on that.
Lisa Ramsey: Trademark WatchDawgs has been doing letters of
protest. Sell T-shirts and similar goods; trying to get PTO to pay more attention
to failure to function/distinctiveness. First Amendment arguments may also be
available to shape TM laws. Need more work on validity stage, to get more marks
rejected.  Amazon took down romance books
with “Cocky” in the title on the basis of a claim based on a registration that
was actually descriptive. More rigor is needed. Should be using common sense to
refuse to register.
Sheff: the market is deliberately set up to encourage
concentration—it saves consumers from having to think more by encouraging
consolidation. Means that not every purchase presents us with the paradox of
choice [though it’s not doing a great job on toothpaste]. Only when the
alternative serves a significant interest making significant resources available
to press back on the expansion of TM claims do we see resistance to rules that
increase bigness.
Linford: we don’t ordinarily change liability now at T1 b/c
we think the conduct will not be tortious at T2 (e.g. self driving cars may
eventually be good, but are they doing harm now?).
Gangjee: reminder that providing detailed information to
consumers is often just not possible: they can’t process too much. May need
competition authorities to intervene in such cases.
Fromer: defends role of academics in helping little guy.
Work w/Congress on TM registration—they tell us they’re interested in the
little guy. Can be effective way to get Congressional ear. And sometimes small
and large business interests align. Large businesses can be trying to enter the
market again and again and again: Target was concerned with fraudulent TM
filings; willing to bear the costs to fight it.
McKenna: Amazon’s TM procedures will displace a lot of TM
law even if we get the cases perfect, given how easy it is to register. Sheff’s
comment: not clear that the system decreases consumer info: we’re awash in
signifiers, differentiation, multiple brands, same producer making lots of
brands at multiple price points. We might be better off with classic competition.
Sheff: maybe represents some actual segmentation in the
McKenna: possible but we all know often there aren’t actual
differences. Open Q whether this is any simpler than the alternative.
Silbey: opportunities to push back against Amazon program
versus pushback that happened against Content ID? Models to be found?  Are we assuming a policy of equal
opportunity/do we want to say that incumbency bias is a problem? Is it bad that
having predictable winners and losers based on market share is a thing in TM?
If we think so, what would the responses be? E.g., embracing reverse confusion,
rejecting IIC, strengthening Tea Rose doctrine, value inherent distinctiveness
over secondary meaning, something else?
Grynberg: you don’t need all that much TM law to get an incumbency
bias. Ralph Brown was already complaining about incumbency bias when the scope
was much smaller. Secondary meaning alone did that. Not necessarily tied to
extensions of TM; exogenous forces did the work.
Goldman: TM law already ignores shaping of meaning by
intermediaries, e.g. grocery stores who decide where to stock things even if
they don’t have house brands. There are pronounced problems w/intermediaries
but it’s not just Amazon.
Fromer: EDNY case, 2 weeks ago: unregistered TM; sold goods
on Amazon. Chinese individual got a registration using a photo of one of P’s
goods & went to Amazon and got a takedown. TM trolling/extortion to the
next level. Eradicated P’s business. Sought injunction to get Amazon to
reinstate them; injunction granted even though Amazon isn’t a party. Law is not
willing to step back fully but motivated parties [not to mention court’s willingness
to ignore the terms of the contract w/Amazon!] will have to involve it. TM bar
has thought for too long that registrations impose no costs on others; clearer
than ever this isn’t true. Amazon is a good place to look for these arguments.
Lemley: To say that TM is a small part of incumbency is not
to say it’s not a part. TM law has a role in worsening the problem. The problem
is worse now than it was in Brown’s time: every market is more concentrated now
than through most of the 20th century: fewer and fewer winners across a wide
range of industries. This was not inevitable and Europe is going in the
opposite direction: US is now less competitive than Europe, reversing the
historic pattern. Blame on antitrust, but also on IP and other tort law wielded
against disruptive challengers to incumbents. Another potential step: intermediaries
as allies, advocates pushing back against expanding IP. The reason we still
have an internet, for as long as we still do, is that a couple of big tech
companies lined up ten million people to fight SOPA/PIPA and stop fragmentation
of internet. They are dangerous allies b/c their interests may not align; they
can be coopted; they are easier targets for legislation. But if you’re a small
print on demand company, one way to fight back against brand bullies is to
enlist Amazon. The risk is that they cut a deal and back away, but they’re at
least provisionally a complicating factor: a big guy with incentives notionally
aligned with selling more varied stuff. Also grocery stores!
McGeveran: Ratchet effect of rights accretion may give
courts pause: if we have reason to believe that consumers are guessing at what
the rule is rather than reporting their own perceptions, that could be reason
for courts to be consumer-shaping rather than reactive.
Heymann: could do that with surveys. Ask consumers “why do
you think that?”
McGeveran: though there are reasons to question that.
Heymann agrees: people don’t always know what their reasons are.
Silbey: TM law isn’t usually thought of as having an equal
opportunity to compete component, but maybe it should.
Diamond: what exactly is common sense?
Lemley: poor man’s survey: me and my friends. Patent law
flirted with ignoring common sense when you couldn’t find a written connection,
and it was a disaster. We do give the jury/factfinder a lot of discretion when
we use common sense as a standard, but there are different structural regimes
and it does let you weed out lousy claims on both sides w/o requiring a survey.
Dinwoodie: French rulings are almost purely common sense;
they don’t tell you much about their reasoning so they are hard to refute.

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