Trademark Scholars Roundtable, Stanford part 3

Session 3: Remedies in Trademark and Unfair Competition
Introduction: Mark Lemley, Leah Chan Grinvald Discussant: Laura
Heymann, Eric Goldman  
[I had another conference in the morning so came in late.]
Discussion of eBay’s effects. Burrell: In other countries the trend has to been
add more and more remedies, extension of jurisdiction over intermediaries, etc.—US
trend is not recognizable elsewhere.
McKenna: Lack of unfair competition has limited our
flexibility w/r/t remedies; injunctive relief could be limited to font,
presentation, other concerns.
Lemley: Increased use of counterfeiting claims may also be
response to limit on remedies: a way to get out of eBay (maybe) and to get out
of limits on damages/disgorgement.  Disgorgement
other than replacing damages is a windfall to P: it’s money it wouldn’t have
earned (b/c you can’t have double recovery) unless it is in practice just
recovery for unprovable actual damages. Disgorgement as deterrence: if not
limited to willful infringers, will deter some amount of lawful conduct.
Heymann: may also be for damage to reputation that we don’t
think we can measure. [Though there’s no reason to think this actually happens
in terms of reputational harm.]
Burrell: there are people who say that giving up wrongfully
acquired profits isn’t punishment, so willfulness shouldn’t be required.
Lemley: it’s a differently calculated form of punishment.
Treble damages might be more punitive, though they also may be less punitive than
the gains from unlawful conduct, as in antitrust/drug cases.
RT: Irreparable injury: I see it these days often used as
quick way out of a PI analysis when the underlying claim is weak. Analogy to
230: does it matter what the rationale  if the P was going to lose anyway? I think a
reasonable answer is yes, but how it matters is up for debate. Making a bad
case cheaper to fight actually has some value where otherwise costs will deter
assertion of valid defenses. Cf. Lunney, etc.
Goldman: Equitable remedies: all facts are in play; Ps may
not immediately and easily be able to gauge whether they will be able to establish
all the requirements for injunctive relief, which makes it different and worse
as a sorting tool than 230.
Mid-Point Discussants: Bill McGeveran: Notable that
intermediaries will stand up for users in some circumstances, e.g., Fourth
Amendment issues/tell police to get a warrant. [Though it’s less risky in that they
don’t face severe financial penalties as long as they merely seek confirmation from
a court about that, and they also may think that law enforcement demands/burdens
on the platforms can be made more predictable this way.] Privacy by design as a
potential model for TM remedies, remedial modesty. Easier online to find the
people who need corrective advertising than if the ad had been a billboard. UX
can be targeted. Also greater ability to monitor compliance, which could give
courts more ease in ordering targeted remedies.
Jessica Silbey: remedies as ends of stories. They can tell
us the moral of the story or what the story was about. Confusion in remedies
signals confusion in what we’re trying to do w/TM law. Injunctions tend to
broaden TM rights when they are broad. But no injunction at all seems like a
gutting of the benefit. So how to inform courts/ think more specifically and concretely
on choices w/in the scope of the injunction? Help them think about what they
mean by goodwill. Money and control are the options: why is money not good
enough/why do we go to control? Particularly relevant to TM. In patent/© money
matters a lot; is it b/c there’s a consumer interest where the consumer doesn’t
benefit if $ changes hands? If it’s about control, that’s a different way of
thinking about the moral. Compulsory licensing remedy? Why is that uncomfortable
for TM? What would a reasonable royalty be? Would a licensing remedy be likely
to broaden the scope of TM rights in ways we don’t like, as w/the arguments
over fair use?  Role of attorneys’ fees.
In © cases, there are a lot of settlements that look like reasonable royalties
+ fees, b/c lawyers assume that fee shifting will happen if they get past sj.
Need more empirical work on remedies to inform courts/policies.
In teaching, we could frontload remedies/teach them as front
and center to help students understand their practical importance. We could
help out w/amicus work only on remedies: think about the stakeholders who aren’t
Dinwoodie: Old Kellogg litigation ended up being very much
about remedies: there were multiple cases about what had to be on the box, what
shape the biscuit could be and still absorb milk, and so on. Satellite
litigation is a real thing when we talk about the burden of monitoring.
McKenna: compulsory licensing isn’t that different; look at
how little we actually require for quality control in a licensing relationship.
A lot of stuff that’s licensed, there isn’t any quality to control: these aren’t
products/services w/any expertise in the licensor co. The value the licensee is
getting is the value of exclusivity. It’s not about quality control, which
could be baked into a compulsory license. It’s about the value of exclusivity.
Gangjee: Coexistence agreements as self-help remedies. Ends
up working along similar lines, but may fool the public even though we allow
Heymann: property concepts: the affront of unauthorized use
demands something of the remedy. Not just control of property but control of
reputation/identity, at least for some TM owners.
Lemley: in real TM cases, cases going to what TM is supposed
to be about, reputational interest and consumer interest align and should be
protected by injunction. Not w/confusion w/o materiality. Rather not have those
latter cases at all, but $ is less disruptive than control, so a halfway step
would be to refuse injunction. Should we limit the alienability of those injunctions,
then? Settling by allowing D into the market in exchange for $ suggests that it’s
not really about control/reputation but really just about $.
RT: false advertising remedies are not always but sometimes
tailored to figure out what the defendant actually can say. The solution space
seems wider to courts as does the defendant’s interest in speaking truthfully. Look
at those analogies.
Silbey: trade secret cases can require losing party to pay
ongoing monitoring fees; maybe there’s a workable parallel there. Can imagine
compulsory licenses as a reasonable thing if we’re worried about
anticompetitive market exclusivity, but they could end up just extending the TM
owner’s footprint. Tying losses to infringement: we estimate damages all the
time. Why worry more about causation in TM than in other cases? Estimable v.
irreparable seems like another axis worth thinking about, as does discrete v.
ongoing behavior. Remedies should be as specific as possible.
Burrell: TRIPS prohibits compulsory licensing of TMs, though
of course the US may no longer care.
Fromer: Gucci allowed Gucci Ghost to infringe: makes Gucci
more cool by allowing it (though not allowing certain others). Uncontrolled use
can sometimes be good for brand owners.
Diamond: Monitoring isn’t realistic in many cases. Go to Blinded
Veterans website: there’s no disclosure. Is it b/c they just gave up b/c disclaimer
wasn’t enough? Or is it that they’re now ok with the market and there’s no
confusion/overlap problem?
Silbey: TM owners build monitoring into their own practices;
the question is whether there are creative ways of shifting costs. TM owners
get a lot of feedback from clients about possible infringements—monitoring is a
partnership b/t audiences and owners. In some cases, Ds had to submit ongoing
evidence of uses and how they change over time. So a T-shirt maker might have
to submit new designs for approval. But she only found that in merchandising
cases. Costs of monitoring might be different across types of cases.
Diamond: Across cases, the Q is whether people think it’s
worth doing.
Silbey: there’s an expressive component to a judge saying it
should be done. Trade secret monitoring doesn’t seem to be much enforced but
hangs over employees’ heads.
McKenna: monitoring is a normal part of complete injunction,
which says don’t use mark X or anything too similar. What is too similar is an
ongoing Q. So court needs to pay attention to how it’s writing the injunction.
There’s a difference b/t requiring “reasonable prominence” and requiring this
font/this size. Happens all the time with settlements too. It’s a marginal
additional cost.
Silbey: we could add clarity/predictability.
Gangjee: also happens with parallel imports/repackaging
& rebranding required: you have to submit samples. So it’s already built
into the system.

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