Trademark Scholars Roundtable, Stanford

Trademark Scholars Roundtable
Session 1: The Current Framework  
To what extent does current trademark or unfair competition
law reflect consumer expectations or seek to shape or set them?
Introduction: Stacey Dogan
Categorize rules as norm shaping v. norm following. To what
extent are courts taking into account other values that may relate in some ways
to consumer expectations but are often independent of them—speech, competition?
Almost everything that is supposed to shape consumer expectations actually
belongs on the final axis: courts not reflecting expectations of consumer perception,
but decisions made recognizing some other value intrinsic to competition law or
complementary/independent like deference to patent law, speech considerations.
Malleable notion of consumer confusion/distortion of economic
concept allows courts to dress up anti-free riding in the language of
confusion. They’re saying they’re shaping the law to intervene when consumers
will be confused, but there are many doctrines like the merchandising right and
early internet cases that use language of confusion to shape the market where
courts think it’s just not fair for D to take advantage of economic value of P’s
mark. They are often unmindful of the consequences. Might shape consumer
expectations de facto in a way that disserves speech values/competition values/deference
to patent law and other values.
Discussant: Mike Grynberg: one entry point may be reasonably
prudent consumer; a construct the court can’t avoid. 9th Circuit moved from
consumer as fool to consumer as reasonably sophisticated in internet cases.
Consider consequences of cases like MTM for persuadability of consumers: allows
Amazon to serve as a platform, but a different one that subjects us to
algorithmic nudging; allows deemphasis on TMs online. If you use Amazon as your
agent, it can mask the effect of the TM/make you less vulnerable to persuasion
that Beebe talks about but does allow access to search/information. One consequence:
system level effect of overall rule; people tend to start searches at Amazon.
Dev Gangjee: quality function. Consider that clothes were
made in same factory for major brands; building collapse killed a thousand, but
the brands were never blamed for that. Outsourcing allows them to say this has
nothing to do w/me: prevents the shaping of consumer expectations. Meanwhile,
Corona beer’s sales have been harmed by the virus: TM has limited amount of control.
House brand space: What’s happening there is interesting; recognizes
both the power of brands but also the policy of allowing competition.
Dinwoodie: is there symmetry b/t situations in which courts
find confusion because of non-perception-based reasons versus when they find
confusion unlikely for non-perception based reasons/values? Are there reasons
they might behave asymmetrically around articulating their reasons?  
Dogan: Sometimes, in the face of confusion; we need to think
about consumers’ interests, not just their expectations. Those other factors
come into play in consumers’ interests.  Wal-Mart frames itself as about consumer
expectations, but it’s really about policy; KP Permanent explicitly says it’s
about rules even in the face of confusion.
Fromer: consumer doing the rhetorical work as the author in ©;
the consumer is invoked but has no control in TM litigation; used by two
businesses to advance their own interests. Public perception of TM is not what
TM is: Sussex Royal conflict; public perception is either “ this is not right”
or “they can do what they want because they are royals,” whereas TM doctrine
wouldn’t care whether they are in fact royal.  Broader public understanding of TM as
something they can believe in, but what that means for policy is unclear.
Linford: Tendency to speak about consumers as people who can’t
figure out what they want or don’t know what they want; consumers as Trojan
horse for market manipulation. That’s troubling to him. Is it appropriate to
think of competition as divorced from consumer needs in a market? Can
competition be divorced from how consumers see the world? [If consumers are
heterogeneous, then yes v. the consumers whose confusion is given priority in
many of the troubling cases.]  Do we
think that litigation reaches consumers or do consumers ignore the ripples from
that litigation? If we think that consumers don’t react, then TM will create a mismatch
b/t law & consumers’ use of TMs as we try to refine it.  Note that TM does not require the TM owner to
keep consistent quality; you can’t forfeit the mark by just changing composition,
as w/Twinkies. Then it becomes unclear why you can abandon the mark by
transferring it and changing composition.
Lemley: hears the claim that norm entrepreneur version of TM
is anti-consumer but that’s wrong. TM doctrine isn’t driven by consumers, it’s
driven by [P characterization of] a small subset of the least sophisticated
consumers—easy to have a one way ratchet when 10-15% confusion is enough. Neglects
interests of nonconfused consumers.  How
the law feeds into consumer decisionmaking: true that it rarely does so directly.
But what it does is mediate in the forms of product choices that are available
or not available. If the law decides that only university licensees can sell
university Ts, then consumers can’t readily access non-licensed T shirts. If Amazon
v. MTM comes out the other way, consumers get different choices and behave
differently b/c product mix is now different. What Lemley sees is not just a
battle over reasonable consumers but increasing move away from focus on consumers
at all: TM is not paying attention to consumers’ interest: dilution,
merchandising right, free riding, counterfeit cases. Even in classic consumer
protection cases, the thing we’d theoretically care about—surveys—play a small
and lessening role over time in deciding cases. Increasingly determined by
judge’s perception of right answer.
Litman: consumers don’t need to make the relevant legal
distinctions but that does mean it’s hard to formulate the proper question to
consumers, for whom law is an undifferentiated cloud. If we took consumer
reaction seriously, we have to start asking different questions.
Burrell: are there situations where courts genuinely set out
to try and shape consumer expectations? A degree of consumer stupidity we’re
not prepared to tolerate. Seems to come up in random ways. We’ve been told that
anyone who thinks McDonald’s makes Big Mac wine is so stupid we can ignore
them. But why that and not other cases when courts protect the “moron in a
hurry”? Court just doesn’t like this group of consumers, is that really the
reason?  Historically and to this day in
EU, there is a positive dimension to trying to shape the consumer: attempt to
build a European consumer as a nationbuilding exercise. [Shari Diamond: how is
that done?] We have a court that takes a certain view of the linguistic
competence of the average European consumers; in some way consumers in
Spain/Germany are supposed to be equated. Pushing not just uniform TM but a
notion of European-ness.
Gangjee: reasonably observant consumer traces back to
labeling cases/free movement of goods cases: a consumer is supposed to pay
enough attention to see that pasta is produced in Germany and not Italy: that’s
a conscious creation of standard to enhance free movement of goods.
Dinwoodie: Explicit policy: we want to allow the capacity
for businesses to be Europe-wide. The consumer is used to further a policy
about businesses.
Ramsey: First Amendment goals: does regulation directly
advance gov’t goal without suppressing too much speech.
RT: (1) Natural for courts to want to have their cake and
eat it too in terms of saying “our policy rule won’t cause much real confusion”;
not clear we want to take them that seriously, though they probably are saying
something about their expectations of consumers versus the error costs of litigation.
(2) Double identity/counterfeiting mean that courts don’t have to articulate
their policy reasons when they’re finding actionable conduct. Maybe an argument
in favor of those doctrines so courts don’t have to make up rationales that are
then extended in weird ways?
Session 1, Cont’d Mid-Point Discussants: Shari Diamond, Mark
McKenna, Alex Roberts, Jeremy Sheff
I had to teach so missed a bunch!
Notes from Alex Roberts:
Original prompt was about current tm law and how it reflects
or seeks to shape consumer perception
Discussion has been predominantly about courts
[Linford] mentioned “consumers as the trojan horse that
motivates brand manipulation of markets” –I want to talk more about that brand
b/c tm law isn’t just courts, it’s C&Ds, it’s disputes
negotiated behind closed doors, it’s TM decisions made in the shadow of the law
brands can be remarkably effective in shaping consumer
expectations and thus nudging the law in the direction they want
Best example is super bowl policing
We all know that in principle, NFU says it’s ok to mention
an event (boston marathon case, but more commercial)—get your wings and pizza
for SB, etc
BUT NFL has policed so aggressively that brands are
terrified and won’t use it, pushing consumers to believe that the only co’s who
can utter the words are SB are the official sponsors
When/if a court goes to enforce a claim, if it looks to
consumer perception, it may find NFL has changed consumers’ minds and
Another example is genericide—when brands like xerox really
actively deploy an anti-gen campaign, do consumers change understanding? Does
that budge the law? Maybe not in the same way
Another is look-for advertising
Trade dress may not seem to be used as a mark but co’s
drawing attention to it can be persuasive both to courts and consumers
Recent ex this week when it came out that apple doesn’t let
movie villains use iphones or apple computers
Whether by product placement agreements or just market
Will that have an effect on consumers? Expectations about
product placement seem to be all over the place
Oullette: why is it so hard to have good data in trademark
cases? Outside experts thinking about how to conduct surveys, validate
methodologies—could do it as distinct from any given case, test against major
brands in market. [Those brands would hate that.]
Lemley: courts are surprisingly sophisticated analyzing the
limits of surveys, compared to how we treat other evidence. The broader Q is
whether the survey is really getting at the thing we want to get at, a tougher
issue. Both sides hire survey experts whose job is to design a survey that will
get the desired result to the greatest extent possible—not cheating, but
shading. Neutral technical expert? Might be interesting.
McKenna: There are so many different theories of confusion
it’s impossible to design a survey to capture them all; the survey is wonky
because the parties are gaming their theories of confusion. Who are the
relevant consumers? Also a key question that is manipulated; can’t be
standardized.  Doctrinal complexity can’t
be fixed by surveys.
Diamond: may be able to get more consensus, e.g. on who to
survey. Such a strong adversary system that it’s hard to intervene in that. In
Teflon surveys, the reports never report who flunked the test. Those people are
gone and ignored in our analysis, but we shouldn’t do this—merely taking them
out seems bizarre unless we just don’t care about them [which might make sense
in a confusion case but not a genericity case]. 
Posner says that cases go to juries only when the judge can’t figure it
out (and therefore when it doesn’t really matter who wins).
Heymann: surveys don’t separate out source, sponsorship, or
approval, but those aren’t the same things. Could encourage a model survey that
would test these things differently. For distinctiveness surveys, we’re not asking
the right questions either—compare to Roberts on failure to function.
Association w/company is not necessarily identifying and distinguishing the
source of goods & services (e.g., Gene Simmons hand gesture). More nuanced
questions should be about whether a particular feature is acting as a TM.
Bone: there’s a point in between shaping consumer perception
and trying to follow it: I have a view of what consumers should think and I
make a decision in line with that view, hoping consumers will follow. If we
thought about harm and not just confusion, a lot of the problems we’re identifying,
though not all, would be framed differently/would go away.  TM is funny b/c we do focus on the consumer.
We have a market based view of social value. If the consumer wants it, it
matters from a social perspective. Compare ©, where we don’t do surveys about what
authors think. We instead have a concept of authorship and of a good society
that has authorship, regardless of what consumers might want. Prevents us in TM
from asking similar Q about a good society and things like Veblen goods.
Sheff: Veblen goods is more complicated: for me to win a
positional competition, you have to lose. So giving some consumers what they
want means giving other consumers what they don’t want. And maybe more of TM
than we would like to think is like that.
Grinvald: other structural institutions that shape the
market: to produce a movie, you need insurance. The insurer demands all IP be
cleared. That affects what gets on the screen (see recent reporting on bad guys
not using iPhones
in movies
) and then that affects consumer perception.
Gangjee: how do you use empirical evidence to construct an
abstract model of the consumer? Positional signalling: where a symbol appears
on a product affects whether it functions as a mark. German case about hashtag
phrase on T-shirt: the initial decision is that it’s informational, but if it’s
not in use how do you know where it will be put on the T-shirt? Court
ultimately says that as long as a TM use (on label) is foreseeable even if it’s
not the most likely then it’s inherently distinctive, which is an easy path for
TM registrants.  Lionel Messi/Massi case:
if a significant proportion of the public is not confused, registration should
be allowed: now at the ECJ; the lower court decision reversed the traditional
rule and we need to decide which public we care about.
McKenna: In subsets of cases, we could discount consumer expectations
altogether or we could weigh it with other things; consider whether we do it
wholesale or retail, which connects to Fromer’s earlier point about the role of
the jury. In the world of technical TMs, the proof structure was technical TM +
competing goods = liability. The rules were formal and not functional. No room
for jury in most cases. To the extent we want similar rules, they are likely to
be best implemented on sj and similarly. Unfair competition was equity and not
for a jury at all.

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