IPSC: Remedies and Creativity

Panel 24 – Remedies:

Thomas F. Cotter, Nominal Damages—and Nominal Damages
Workarounds—in Intellectual Property Law

TransUnion v. Ramirez—FCRA case where D allegedly failed to
use reasonable care and people were falsely identified as potential terrorists;
sought statutory damages, but most Ps were unable to show that the info had
been distributed to third parties. These Ps didn’t suffer concrete harm and
lacked standing to sue. Congress can’t enact an injury into existence and can
provide a remedy only for concrete harms, which can include intangibles like
emotional distress if they’re recognized by the relevant body of law and
proven.

Several modern-day remedies were enacted to reduce the risk
that IP owners would otherwise be able to recover only nominal damages—reasonable
royalties for patents; statutory damages for © infringement; disgorgement of
total profits for infringement of design patents. These nominal damages workarounds
are available without proof of lost profits or quantifiable harm to the D. Reasonable
royalties are based on a legal fiction of a hypothetical bargain; can a
hypothetical injury be concrete? He thinks the answer is mostly yes—history and
tradition offer a meaningful guide to what counts as an Article III injury.

IP derives much of its value from opportunity to license, so
it often makes sense to think of reasonable royalty as a cognizable harm. By
contrast, elsewhere it might not make as much sense to think of the problem as
a lost opportunity to license, e.g., the listing of someone as a terrorist.

Are these workarounds an appropriate response to the domain-specific
problems or would reasonable royalties be appropriate across the board?

Basically, reasonable royalties are superior to statutory
damages and disgorgement for public policy reasons. Inconsistency/predictability
critiques could be applied to reasonable royalties too, especially in patent,
but there are some ways to deal with that, and it might be easier in © and
design patent where the damage awards are lower.

Are nominal damages appropriate where the conditions for the
use of the workaround aren’t present? E.g., owner failed to register in a
timely fashion and she doesn’t prove actual damages or entitlement ot
injunction b/c infringement has ceased—is court obligated to dismiss the case
for lack of subject matter jurisdiction? Patry says Copyright Act doesn’t
permit nominal damages, but he’s not sure that’s right. Predecessor Act and
Lanham Act both said/say nothing about nominal damages but courts sometimes
award them. They aren’t a consolation prize for a plaintiff who fails to
plead/prove actual damages; they’re damages by default. Suppose a patent owner
fails to substantiate its damages theory with admissible evidence—the statute
says “in no event less than a reasonable royalty.” Nominal damages are often a species
of general damages. If there’s no proof, there should be nominal damages.

Are there any circumstances in which the award should be
nominal or zero damages as a matter of law? Yes, e.g. where D would have been
no worse off had it used a noninfringing alternative, at least where it’s
possible to quanitfy the value of the difference b/t infringement and next best
noninfringing alternative, though that might be harder in ©. What if D offers
to manufacture/sell an invention but doesn’t follow up with sales? Some cases
allow big damages for a hypothetical bargain. Without use, maybe there’s no
reasonable royalty under the statute, which does speak of a reasonable royalty for
the “use.” NPEs should be able to get reasonable royalties—no reason that a
practicing entity’s lost licensing royalty is a cognizable harm while an NPE’s
isn’t.

Are there any implications for injunctive relief? Before
courts awarded reasonable royalties, in the 19th century they
sometimes awarded established remedies for the entire patent term, and there
was no injunction because that was an adequate remedy at law. Courts usually
awarded injunctions b/c that was hard to prove; but now it’s not a stretch to
say they should just award reasonable royalties prospectively as an adequate
remedy.

RT: Why is the paper about “IP” and not patent & © with
a trade secret chaser? The analysis doesn’t seem as successful for TM, ROP. Related:
if damage is an element of every claim under Article III then why are nominal
damages ok? Aren’t they just the invention of an element of the claim?

A: Not sure there’s a principled basis for the distinction
made for nominal damages—the majority in one recent case approving it was
written by Thomas who of course dissented in the TransUnion case. History and
tradition is an important consideration in determining when courts may award
nominal damages.

RT: Which is particularly weird for patent because that
seems to be saying that the common law [not legislatures] get to decide what is
a harm, but there is no common law patent (and common law © is a very different
thing than statutory ©).

Matthew Sag and Pamela Samuelson, Hysteresis: An Empirical
Study of Copyright Injunctions After eBay v. MercExchange

In 2012, study found eBay ignored/ineffective in © cases;
cited in only 11% of cases; applied in a cursory way; continued to grant
injunctions at high rates. Maybe it took some years to take effect. Reviewed
about 70 cases in which injunctions were denied; there are patterns.
Hysteresis: it takes time for changes to propagate through a system.

Collected 330 cases 2000-2019. There are a lot of easy
piracy cases where it just wouldn’t matter what the standard was, you’re going
to get an injunction. Overview: eBay was never as poorly cited in cases where
it would be likely to have an effect as the early literature would suggest; it’s
now better cited (around 50% in nondefault cases; citations to eBay or its
progeny start out at 40% and jump to mid-60s). One category: in nondefault
permanent injunction cases, the citation level hasn’t increased, but that’s
because it was always strongly cited in that subset. There are fewer successful
injunction Ps, and that category has increased, showing evidence of delayed
effect, except for where preliminary injunctions were concerned where the drop
was substantial and immediate. Grants bounce around from year to year; weirdly,
the permanent injunction grant rate goes up immediately after eBay, then goes
down and down. In preliminary injunctions, the grant rate goes down immediately,
even before Winter. At the same time, number of injunction cases are going
down, while damages claims aren’t going down at the same rate. There is an
apparent selection effect where Ps aren’t pressing injunction claims as
aggressively.

Why such different results from Liu’s 2012 study? Did a full
replication study b/c didn’t have access to Liu’s data on reported cases (506);
we found 86 using that methodology, 29% of which cited eBay. It wasn’t really
based on reported cases, but unreported cases that were available on WL and
Lexis. This really matters because those cases were chock full of easy cases
padding out the decisions, particularly unreported default judgments.

Takeaways: if you had the view that eBay didn’t affect ©
cases, you can’t hold that view any more. Or empirical studies, you really have
to think about the difference between easy cases and hard cases, label cases
carefully, and think about mechanics of legal change. Don’t believe everything
you read! Don’t extrapolate from everything you read. If our study had included
unreported cases, we would likely report much higher rates of injunction.

My reaction: hysteresis is very plausible in general—after the
TMA and its explicit statutory command, we’re still getting cases citing eBay
in TM/advertising cases and that’s just a matter of diffusion of knowledge.

Jorge Contreras: Other people did say that there were big
changes in ©; that was always his understanding. Reported/unreported cases are
complicated—there can be value to unreported cases, as in the patent world. And
they matter to practice. Maybe benefit in reporting both sets of results and
explaining why you think they differ.

Panel 23 – Creativity and Culture:

Amy Adler and Jeanne Fromer, Memes on Memes

[Came in midstream b/c of other panel attendance] Memes further
blur the commercial/noncommercial distinction, as well as the idea/expression distinction
[snowclones!]. With a meme, the expression becomes the idea. [I think this
might be a characteristic of images that memes bring to the forefront]. Memes
move faster than life +70—they become stale in months. Selective enforcement is
also huge—everyone can use the meme except a few targets. Decentralizes
authorship: the work becomes what’s important b/c it spreads, decontextualized.

How could © respond?

One possibility is do nothing, but leaving it alone is a bit
dangerous. Could shift norms, and that could be bad. Another possibility: go
down the attribution route. But it’s very impractical in this context. How do
you attribute things that keep changing and shifting? Another option: tailor ©
to new realities of meme culture. Selective enforcement feels much more
troublesome from a free speech perspective when you’re disallowing only a few
people from use.

Jennifer Rothman: the disallowed use is most likely to be
fair use. Reducing term would also be much harder than making other changes
like attribution. [I think those are different and both significant kinds of “hard”—the
former is political, the latter is in enforcement/implementation]

Madhavi Sunder: Is this new or part of the broader critiques
we’ve had for a long time?

Fromer: the paper goes into this; there are strands of this throughout
© but tech makes copying that much easier and the rise of the visual also has
had a real impact.

Adler: also, looking for the author of a meme is, in a way,
folly.

Madhavi Sunder, Intellectual Property Is Theft!

Began career celebrating appropriation—e.g., appropriation
of Indian stories to tell new lesbian narratives. Still thinking about it, but
in different ways now. Cultural appropriation and racial justice: as a place of
redress and potential remedies, as with the Washington Football team. Social
movements brought down brands that TM law couldn’t. George Floyd’s death had
implications beyond criminal law [RT: perhaps only beyond criminal law
and not within it, unless something changes about qualified immunity].
Dispossession of Black intellectual and physical labor—history and continued
source of our nation’s wealth as founded on expropriation of racial minorities.
Racial capitalism: defining resources from Black communities as nonproperty and
free for the taking. Reparations claims have moved from property to IP.

Of course, “art is theft,” as Picasso says, and there are
arguments that culture can’t be owned. Has agreed with those values and
impulses, but trying to hone in on when cultural exchange crosses into
misappropriation or theft. Trying to create a definition that does more than
focus on taking of resources from one culture to another, but starts with
Ijeamo Oluo’s focus on exploitation by a more dominant culture. W/o that,
cultural appropriation becomes much less harmful. And there’s distributional
harm—redistributing benefits of innovation away from subordinated group.

3 kinds: cultural degradation; misappropriation; racial
capitalism.

Cultural degradation: understanding relationship b/t
representation and structural racism. Jim Crow, before it came to be the
moniker of structural racism, was a brand. A created minstrel character in 1830:
the performer happened on a disabled older Black man; was taken by the man’s
movements and created a character mimicking/mocking him. Racist brands have
continued despite the Lanham Act’s bar on disparaging marks (until invalidated
in 2017). People feared that would usher in racist marks, but huge culture
shift occurred instead. Navajo Nation’s litigation to control designs as marks—offers
possibility of better control (in litigation against Urban Outfitters).

Misappropriation: Traditional knowledge/global fashion
brands taking designs from indigenous communities: a lot of pushback from
culture ministers around the world. Asking not just for credit but for
partnership. And the old idea that artists can just take what they want is
under attack. Such borrowing often happens with “blithe thoughtlessness,
creative entitlement”—that’s what’s being called out now. Cases brought by
collectives against Neiman Marcus, other fashion proprietors: what’s being
taken is the work of individual artists. Using © and “cultural appropriation”
as a legal claim; case was settled.

Racial capitalism: how to contend w/appropriation that
occurs when culture only becomes valuable when mediated through white
performers. Copyright in dance—claim for © in the Carleton dance was rejected,
but Beyonce’s choreographer received a copyright in popular dance choreography
and has started a firm to help young choreographers get power over their art,
has talked about “authentically Black” dance and art and wants to protect that
against Fortnite and other exploitation. Controlling dance might be an important
place to start affirming Black voice and body, taking back what minstrelsy appropriated.

RT: intersectionality: guessing you don’t now object to the Indian
lesbian stories; does race have indexical priority here? [Also, I’m again going
to recommend Ashley Mears’ Very Important People, which is about how women’s
beauty capital is valuable only in the hands of men.] Concerns about whether
move from tangible to intellectual is just another way to keep resources out of
the hands of the poor—who gets hired to create is still largely determined by
who got into a well-known college, and so middle and upper class Blacks are the
face of continued appropriation from poor Black communities.

A: yes, focusing on power, both within and among communities.

Trevor Reed, Restorative Licensing

Tribes/mascots are examples of wins against cultural appropriations.
Trying to identify IP rights and ways to remedy violations. Judicial colonialism
makes it difficult for tribes to enforce their own rights structures. We don’t
have good numbers on quantity of Native American creations being used by other
institutions w/o their permission. What we do know: a significant number of settler
institution holdings likely are within the subject matter of tribes’ IP laws.
Bootlegged recordings, looting, graverobbing, acquired from someone not
authorized to transfer IP. While most institutions don’t adhere to tribal IP
laws, there’s nothing inherently inferior about them; tribes are separate
sovereigns and Copyright Act is silent about preemption of tribal laws.

Johnson v. M’Intosh—indigenous sovereignty is held inferior
to colonizers’ sovereignty, based on outdated assumptions about race and
culture. Have to use federal IP or other law to make claims. NAGPRA is the
prime example recognizing right to demand return of patrimony taken in
violation of tribal law. Can also enforce law when there’s entry onto tribal
lands, but most appropriation is off the land. Institutions have also started
to take private action to recognize tribal IP. Different standards, some of
which recognize tribal interests overriding IP defaults, some of which balance,
some of which don’t recognize tribal interests. Some acknowledge harm; others appear
motivated by efforts to increase inclusivity or limit liability. Some require
consultation w/tribes before making indigenous IP available; some require
repatriation where gathered illegally or w/o consent; others only allow input
on whether materials are culturally sensitive, which reflects institution’s
view of what tribes should be concerned about.

Violation of tribal IP laws is not just an ethical matter.
It is experienced by indigenous individuals and their communities as a
violation of the law. Judicial colonialism makes it difficult to enforce those
rights in settler courts; restorative justice may provide a framework for
resolving claims.

Columbia U decided to take responsibility for
misappropriating tribal music. Many of their collectors had violated tribal laws.
Went to communities to understand what the harms were and what expectations the
tribes had for Columbia to make them whole. Shame, embarrassment, psychological
issues that result from disclosure of private material to public: Boy Scouts
performed material outside tribal control; record labels made ceremonial sounds
available to the public. Bad public policy resulted from having lives depicted
w/o authorization. Community closed more now b/c of fears of unauthorized rampant
appropriation. Children being confused about right source of knowledge in the
community. Community wanted enforcement of their own IP rights and structures.

How do we repair the harms of the past and meet the
expectations of communities going forward? Extend tribal jurisdiction over
specific cultural materials just as state and federal IP law governs.
Institutions must learn tribal IP laws; provide restitution to the community
for violations of such laws; police themselves going forward; maintain contacts
w/tribe to ensure correct administration. Many institutions are willing to
interact though not clear they’re willing to subject selves to liability.

What about patrons/general public? Restorative justice doesn’t
talk much about the community surrounding the offender. The real concern is not
the institution, but the entities using the institution’s resources.
Restorative licensing framework: bring the institution, patrons, users under
the tribe’s jurisdiction. Exercising jurisdiction under nonmembers could be
tricky, but can be done with contractual provisions involving choice of law,
conditional licensing as with EULAs limiting uses to those allowed by tribal
law. Repatriation of any copies for violation.

Chris Buccafusco: Who is the tribe for these purposes with
older materials? Eastern Band of Cherokee may have different approaches than
two tribes in Oklahoma. Possibility of race to the bottom about who has the
right to license things.

A: could recognize tribes as constituted now, or religious
authorities w/in tribe as subgroup having sovereignty. Could be that Eastern Band
has separate jurisdiction. Timing and way tribe settles that could be helpful.

Betsy Rosenblatt: Restorative justice framework seems useful
and valuable for beyond tribal sovereignty and to other conceptions of
differing norms bases. So thinking about negative spaces: if/how this is
different from other norms-based subcultures. Calls for legally enforceable
licensing attached to these processes seem to require more tangible/concrete
links.

A: key question: what’s the justification for treating these
materials differently? There are groups trying to create their own sovereignty,
like Creative Commons [I thought he was going to say the “sovereign citizens”
movement] [BR says that CC requires contractual privity]. We’re talking about
dispossession. Were it not for judicial colonialism, you would have to obey
tribal rights. [In the US, you don’t have to obey British IP rights to the
extent they conflict with US © law and/or the First Amendment. But I take the
argument to be more that, if there weren’t a US, we’d be living under different
tribal legal systems entirely. But would those systems really look like current
tribal law? That seems like a big reach, since other nations have also settled
on various consensus ideas about IP—even to the extent of a couple of mandatory
exceptions and limitations. There is not international consensus about most
issues relating to traditional knowledge. In the hypothetical, have the nations
joined Berne? Lack of full sovereignty has insulated tribes from many of the political
pressures that would otherwise be brought to bear by IP industries—the RIAA/MPA
don’t lobby them because they don’t have to. (Compare what happened when pharmacos
tried to use the tribes for patent laundering.) I think using the sovereignty
argument as a way to distinguish the tribes from other groups is in some
tension with the argument for using restorative justice because of the violations
to which the tribes have been subjected.]

JohnJohn Uket, Transforming Policymakers into Innovators in
the Civil Service of Developing Countries

Nigeria as example: head of civil service/bureaucracy adopted
mission statement to provide professional and efficient services that are
responsive to citizens and other stakeholders. But this isn’t possible w/o
innovation in civil service structure.  About 90,000 civil servants in Nigeria. Many
struggles, including low overall trust in government. Innovation struggles in
government which has a more rigid operating system which emphasizes stability,
certainty, and predictability. Requires leadership: openness to incremental and
transformational ideas from inside and outside the structure. Openness to risk
as well as feedback—fear of risk means nothing happens. Human factors are key
to dissemination of innovation and that has to be understood before success.

Q: Consider path dependence literature too.

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