NY high court reiterates that “consumer-oriented” is broad, covers statements to thousands of gov’t employees

Posted on July 6, 2020 by rtushnet

Plavin v. Group
Health Inc., 35 N.Y.3d 1 (Mar. 24, 2020) 

The Third Circuit
certified to NY’s highest court whether a plaintiff “sufficiently alleged
consumer-oriented conduct to assert claims under General Business Law §§ 349
and 350 for damages incurred due to an insurance company’s alleged materially
misleading representations made directly to the City of New York’s employees
and retirees about the terms of its insurance plan to induce them to select its
plan from among the 11 health insurance plans made available to over 600,000
current and former City employees.” Yes, it did. 

The plaintiff
alleged that the summary materials he received about the health plan were
misleading about various matters, including out-of-network reimbursement rates
and coverage. The district court held that, because “the alleged deception
[arose] out of a private contract negotiated between” GHI and the City—“two
sophisticated institutions,” the conduct wasn’t consumer-oriented because the
City had contracted with GHI on behalf of its employees and, therefore, “[t]he
contract was aimed to benefit only a circumscribed class of individuals.” 

Previous cases used
language such as “[i]n contrast to a private contract dispute as to policy
coverage, the practices before us involved an extensive marketing scheme that
had ‘a broader impact on consumers at large’ ” and“[d]efendants’ alleged
multi-media dissemination of information to the public [was] precisely the sort
of consumer-oriented conduct that is targeted by General Business Law §§ 349
and 350 … even though the subject of the conduct was in vitro fertilization.”
But claims are rejected when the plaintiff alleges only “a private contract
dispute over policy coverage and the processing of a claim which is unique to
the[ ] parties, not conduct which affects the consuming public at large.” 

Here, although the
underlying insurance contract was negotiated by sophisticated entities, “neither
plaintiff, nor any of the other hundreds of thousands of employees and retirees
who participated …, were participants in its negotiation and, critically, that
negotiation was followed by an open enrollment period, which exposed City
employees and retirees to marketing resembling a traditional consumer sales
environment.” That marketing was what was allegedly misleading, not the
contract between the City and GHI. Competition between insurers for subscribers
during the the open enrollment period “resembles the sort of sales
marketplace—characterized by groups of similarly-situated consumers subjected
to the competitive tactics of a relatively more powerful business—that GBL
claims were intended to address.”

 

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Booking.com: validity continues to be disconnected from scope of rights

Posted on June 30, 2020 by rtushnet

U.S. Patent &
Trademark Office v. Booking.com B.V., No. 19–46 (Jun. 30, 2020)

Kind of what I expected, though maybe a little worse in its disregard of scope issues.

Ginsburg writes the
majority (Sotomayor concurred and Breyer dissented). 

“Generic.com” is only
generic for a class of goods or services “if the term has that meaning to
consumers,” and the evidence hree showed that consumers don’t perceive “booking.com”
to signify online hotel-reservation services as a class. So, the Court clears
the way to register a lot of these domain names, because this is not on
its face a holding about how booking.com has secondary meaning, it is a holding
about how the PTO didn’t meet the burden of showing that consumers perceive
booking.com as the name of a service. 

Along the way, the
Court cites the parties’ agreement that “for a compound term, the distinctiveness
inquiry trains on the term’s meaning as a whole, not its parts in isolation.” And
“the relevant meaning of a term is its meaning to consumers.” Although the
Lanham Act provision that “[t]he primary significance of the registered mark to
the relevant public . . . shall be the test for determining whether the
registered mark has become the generic name of goods or services” speaks
directly by its terms only to cancellation, 15 U.S.C. §1064(3), it sets the
standard for genericity generally. However, today’s rule “does not depend on
whether one meaning among several is ‘primary.’ Sufficient to resolve this case
is the undisputed principle that consumer perception demarcates a term’s
meaning.” 

Since consumers don’t
perceive Travelocity as a “Booking.com,” it is not generic. Goodyear’s India
Rubber Glove Mfg. Co. v. Goodyear Rubber Co., 128 U. S. 598 (1888), held that a
generic corporate designation added to a generic term does not create a protectable
term because it adds no additional meaning. But .com might “also convey to
consumers a source-identifying characteristic: an association with a particular
website,” because only one entity can have a particular domain name at a time.
Since consumers know that, a consumer can infer entity-designating function. (Footnote:
this doesn’t constitute utilitarian functionality, which isn’t at issue here.) 

Comment: this
reasoning goes even further than the above and suggests what the district court
held, which is that individual domain names are likely to be inherently
distinctive because of this automatic (de facto) assumption. But the ability of
a term to distinguish this entity from other entities or domain names doesn’t seem to
come into this reasoning at all, even though it probably should. How easily
will consumers remember: was it flower.com or flowers.com? 

Anyway, Goodyear’s
rule is more modest than the PTO argued: “A compound of generic elements is
generic if the combination yields no additional meaning to consumers capable of
distinguishing the goods or services.” 

There is no
automatic classification of generic.com as nongeneric, the Court says, but the
test doesn’t give any weight to the genericity of what comes before the dot; it’s
only whether the full term is perceived as the name of a class. “Evidence
informing that inquiry can include not only consumer surveys, but also
dictionaries, usage by consumers and competitors, and any other source of
evidence bearing on how consumers perceive a term’s meaning.” As to surveys,
they “can be helpful evidence of consumer perception but require care in their
design and interpretation.” We get a cite to our amicus brief noting that “survey
respondents may conflate the fact that domain names are exclusive with a
conclusion that a given ‘generic.com’ term has achieved secondary meaning.” But
difficult questions aren’t posed here because the PTO didn’t contest the lower
courts’ assessment of consumer perception of booking.com specifically. 

The PTO’s real objection
wasn’t to Booking’s exclusive use of “Booking.com” as a mark, but to the risk
of “undue control” over similar language “that others should remain free to
use.” However, the Court thought that trademark law’s existing protections for
descriptive uses sufficed: first, only confusing uses are infringing, and
weaker/more descriptive marks are less likely to be confused: 

When a mark incorporates generic or highly descriptive components,
consumers are less likely to think that other uses of the common element
emanate from the mark’s owner. Similarly, “[i]n a ‘crowded’ field of look-alike
marks” (e.g., hotel names including the word “grand”), consumers “may have
learned to carefully pick out” one mark from another. And even where some consumer
confusion exists, the doctrine known as classic fair use, protects from
liability anyone who uses a descriptive term, “fairly and in good faith” and
“otherwise than as a mark,” merely to describe her own goods. 

[I note that putting
a generic term in one’s domain name is likely to be pretty risky for descriptive
fair use, given “otherwise than as a mark.”] 

Booking.com concedes
that its mark would be “weak” and that “close variations are unlikely to
infringe.” [And we will now rely on courts to ensure that it and other users of
generic.coms stick to that concession—but since the US doesn’t have a cause of
action for unjustified threats relating to IP, the C&D letters can be
pretty aggressive regardless of the likely litigation outcome, and it’s really
hard to get a fee shift as a successful defendant, especially if (as they often
do) courts treat having a valid mark as making any assertion of infringement
reasonable.] 

The competitive
advantage conferred by seizing on a descriptive domain name doesn’t justify
refusing registration. All descriptive terms “are intuitively linked to the
product or service and thus might be easy for consumers to find using a search
engine or telephone directory,” but they’re still registrable. And the exclusive
connection between a domain name and its owner “makes trademark protection more
appropriate, not less.” [And here is the issue that European systems will find
much easier to resolve than ours: that statement makes perfect sense if we
aren’t worried about scope at all. But we should be!] 

Unfair competition
law isn’t a good enough substitute for registration because registration
confers valuable benefits, such as under ACPA and the UDRP. 

Sotomayor,
concurring. There’s no (nearly) per se rule against generic.com registrations.
However, consumer-survey evidence “may be an unreliable indicator of
genericness.” But the Court’s opinion doesn’t make surveys “the be-all and
end-all.” Given the availability of other evidence and the weaknesses of
surveys, the PTO might have been right about genericity here and the district
court may have been wrong; that’s just not the question before the Court. [Although
it is the way to bet about how errors will go, given the parties’ resources. In
other cases like Wal-Mart, the false positive issue has led the Court to
more restrictive rules—but because the Court generally does want to hold out
the prospect of some protection in such cases, the overall result of Sotomayor’s
concurrence at least is consistent with Wal-Mart and Qualitex:
you should have to show secondary meaning for your specific claimed mark
and only then can you get trademark rights.] 

Breyer, dissenting: What
booking.com is, is obvious from the name. Genericity “preserves the linguistic
commons by preventing one producer from appropriating to its own exclusive use
a term needed by others to describe their goods or services.” Adding .com
shouldn’t be enough to do so. 

Distinguishing
descriptive from generic terms isn’t always easy, especially with a compound
term. For a compound, courts have to determine “whether the combination of generic
terms conveys some distinctive, source-identifying meaning that each term, individually,
lacks. If the meaning of the whole is no greater than the sum of its parts,
then the compound is itself generic.” 

Breyer would have
held that appending “.com” to a generic term “ordinarily yields no meaning
beyond that of its constituent parts.” The combination of “booking” and “.com” “does
not serve to ‘identify a particular characteristic or quality of some thing; it
connotes the basic nature of that thing’—the hallmark of a generic term.” Any “reasonably
well-informed consumer” would understand that trademark.com is the website of
the trademark owner, which is why courts generally ignore the TLD when analyzing
likely confusion. 

And here we get to
the heart of the disagreement: because .com will be ignored in an infringement
inquiry, it should also be ignored for validity. (Absent some exception such as
where the TLD interacts with the second-level domain in a meaning-changing way;
also new gTLDs like “guru” might behave differently.) In other words, Breyer
wants to think about scope when assessing validity. 

The uniqueness conferred
by the domain name system doesn’t change the Goodyear rule. “Wine, Inc.”
likewise “implies the existence of a specific legal entity incorporated under
the laws of some State.” [This is an intuitive weakness of the majority’s reasoning:
it isn’t explicitly willing to turn its empiricist, consumer-perception-is-all
gaze on the Goodyear rule, but Breyer seems likely to be correct that
Wine, Inc. is likely to produce different survey results than “Wine.” However,
my sense is that Ginsburg would also allow Wine, Inc. to present its consumer
survey, perhaps with an eye to the problem of de facto secondary meaning.] 

To Breyer, “functional
exclusivity does not negate the principle animating Goodyear: Terms that
merely convey the nature of the producer’s business should remain free for all
to use.” The majority’s “fact-specific approach” rejects that principle.
Although consumers might not call Travelocity a booking.com, “literal use is
not dispositive.” [We might call that production versus recognition: consumers
may understand a lot of stuff they wouldn’t say.] 

Breyer correctly
notes that the facts that supposedly convert some generic.com domain names into
descriptive marks are unlikely to vary from case to case: 

There will never be evidence that consumers literally refer to the
relevant class of online merchants as “generic.coms.” Nor are “generic.com”
terms likely to appear in dictionaries. And the key fact that, in the
majority’s view, distinguishes this case from Goodyear—that only one
entity can own the rights to a particular domain name at a time—is present in
every “generic.com” case. 

So what would
vary? Survey evidence. But survey evidence “has limited probative value in this
context,” given the phenomenon of de facto secondary meaning. Thus, the TTAB
and some courts have concluded that “survey evidence is generally of little
value in separating generic from descriptive terms.” Here, while Booking’s
survey showed that 74.8% of participants thought that “Booking.com” is a brand
name, 33% believed that “Washingmachine.com” was a brand. What’s the
difference? Booking.com isn’t inherently more descriptive than
“Washingmachine.com” or any other generic.com. Respondents were likely reacting
to having heard of Booking.com, suggesting that washingmachine.com could
undergo the same transformation by investing heavily in advertising. Association
of booking.com with a particular company is simply not inconsistent with
genericity.

 

Thus, quoting
McCarthy, the majority rule “[d]iscard[s] the predictable and clear line rule
of the [PTO] and the Federal Circuit” in favor of “a nebulous and unpredictable
zone of generic name and top level domain combinations that somehow become
protectable marks when accompanied by favorable survey results.” 

Also, this rule
threatens “serious anticompetitive consequences in the online marketplace” by adding
to the non-registration advantages of doing business under a generic name: basically,
easier access to consumers’ memories, searches, and trust. Booking says it won’t
threaten similar uses, “[b]ut other firms may prove less restrained,” and of
what use is trademark registration distinct from domain name registration other
than to “extend its area of exclusivity beyond the domain name itself”? 

The majority says
that infringement/descriptive fair use will police the scope of protection, but
we’ve already seen boundary-pushing. (Citing Advertise.com v. AOL, LLC, 2010 WL
11507594 (CD Cal.) (owner of “Advertising.com” obtained preliminary injunction
against competitor’s use of “Advertise.com”), vacated in part, 616 F. 3d 974
(CA9 2010).) “Even if ultimately unsuccessful, the threat of costly litigation
will no doubt chill others from using variants on the registered mark and
privilege established firms over new entrants to the market.” 

Breyer’s dissent is
particularly notable for its repeated use of “anticompetitive” and variants, suggesting
the potential for the revival of a mid-twentieth-century analysis of trademarks
as having the capacity to confer unwarranted market power.

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Expert causation/falsity evidence is admissible in fake review case

Posted on June 29, 2020 by rtushnet

Vitamins Online, Inc.
v. Heartwise, Inc., 2020 WL 3452872, No. 2:13-cv-00982-DAK (D. Utah Jun. 24,
2020) 

Some pre-bench trial
motions here in this Lanham Act false advertising case based on alleged manipulation
of Amazon’s customer review system and misrepresentation of the content and
characteristics of green coffee and garcinia cambogia products. I want to focus
on motions to limit testimony about the reviews. 

VO’s expert Belch was
assigned to study how consumers used online reviews for weight loss supplements
on Amazon.com and whether such reviews were credible to them; and to provide an
opinion about the power of “influencers” to create demand for products, whether
Dr. Oz acted as an influencer concerning the products at issue in this case,
and whether that affected demand. NatureWise argued that the study couldn’t show
injury/causation; Belch didn’t test whether any consumers switched from VO’s
products to NatureWise’s in reliance on any particular review at issue here.


The court declined to preclude Belch from offering an opinion on the cause of
lost sales at trial. Belch concluded that, “[a]ssuming [Vitamins Online’s]
claims are true, and based on [his] business and academic experience, [he]
would opine that [NatureWise’s] practices are deceptive and injurious to
Vitamins Online.” This could be evidence of causation; NatureWise’s arguments
went to weight, not relevance or admissibility. 

NatureWise also
sought to preclude Vitamins Online’s experts Noonan and McAuley from offering
testimony at trial that reviews were literally false, arguing that their report
stated no opinions as to the alleged falsity or truthfulness of any of
NatureWise’s reviews. The report said:

It’s impossible for us to determine if a review is “fake” or not by
using [our] method. In my opinion, it’s impossible for anyone to prove a review
is “fake” just by looking at the review itself. [Our] algorithm is specifically
looking for patterns in the data, which might indicate that the reviews are
biased.

However, the report
concludes that “the only logical explanation of the patterns we are seeing in
the data is blatant review manipulation.” At trial, the experts would thus be
precluded from opining on whether any single NatureWise review is literally
false, but they would be permitted to discuss how they reached their
conclusion— “a discussion which could very well implicate the doctrine of
literal falsity.”

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9th Circuit shows some hostility to functionality for product design, gets federal fame right

Posted on June 29, 2020 by rtushnet

Blumenthal
Distributing, Inc. v. Herman Miller, Inc., Nos. 18-56471 & 18-56493 (9th
Cir. Jun. 25, 2020) 

HM and Blumenthal/OSP
engaged in litigation over “knockoffs” of HM’s Eames chairs and Aeron chairs. A
jury found that HM’s registered and unregistered claimed EAMES trade dresses
were protectable, and that OSP willfully infringed and diluted them, resulting
in an award of $3,378,966 in infringement damages and $3,000,000 in dilution
damages, and OSP was enjoined. The jury also found that HM’s registered and
unregistered claimed AERON trade dresses were unprotectable because they were
“functional.” 

The court of appeals
affirmed the infringement judgment on the Eames chairs, reversed on dilution
for want of federal fame, and reversed and remanded on the Aeron trade dress
because the jury wasn’t properly instructed on functionality. The basic problem
is an insight that the Ninth Circuit has had before, but has often put badly:
if consumers want the product because of the way it looks, but they want the
way it looks because of the reputation of the source, then the appearance is
not aesthetically functional simply because consumers want it for the way it
looks. The problem is causation, because if consumers want the product for the
way it looks, that is often aesthetic functionality. In addition, being
known for introducing a design to the market shouldn’t itself count as the
relevant reputation—that’s the rule of Dastar—as opposed to being known
for making quality physical instantiations of the design. But making that distinction
can prove difficult.

 

Eames chairs

“HM introduced the
first Thin Pad Eames chair in 1958, and has sold hundreds of thousands of them
in the United States, along with a related line of Soft Pad Eames chairs. The
Aeron chairs were introduced in 1994 and were even more successful; by the time
of trial, HM had sold 6.5 million of them in the United States.” Versions have
been “exhibited in American art museums and made repeated appearances in
American pop culture.” The claimed unregistered
Eames trade dress was “the overall appearances of its Thin Pad and Soft Pad Eames
chairs, excluding the chairs’ colors and all components beneath the chairs’ seats.”
The registered trade dress was the
same, except that it excludes the chairs’ upholstery.

 

Aeron chair

The claimed unregistered
Aeron trade dress was the overall appearance of the Aeron chair with an
oval-shaped lumbar support, excluding the portion of the chair beneath the seat
and the chair’s color. The registered Aeron trade dress was the same, except
that it also included the control box under the seat. The difference between
the registered and unregistered trade dresses were not material to the appeal.

The court framed the
aesthetic functionality test as “whether, if one seller were given exclusive
rights to use the claimed trade dress, other sellers would be forced to use
alternative designs that make their products more costly to sell, or for which
consumers’ willingness to pay would be lower for reasons having nothing to do
with the reputation of any source (e.g., the alternative designs would not have
as much intrinsic aesthetic appeal). If such competitive disadvantages would be
significant, then this second requirement for aesthetic functionality is
satisfied.” 

The court of appeals
rejected utilitarian functionality arguments for the Eames chairs, because the
fact that they had some utilitarian functionality didn’t make the overall
appearance functional, nor did the functionality of various features make the
overall appearance functional. “For example, the jury could have reasonably
concluded that the metal trapezoidal design of the Eames chairs’ armrests was
motivated by design considerations, at the expense of the comfort that a softer
surface could have provided.” OSP argued that this shape enabled the “armrests
to be attached to the [rest of the chair] at three points” rather than two
points, but cited no evidence that the extra point of attachment has any
utilitarian benefit. 

The Aeron verdict
was reversed because this instruction (taken from the Ninth Circuit Model
Civil Jury Instructions) was bad: 

A product feature . . . is non-functional if its shape or form makes no
contribution to the product’s function or operation. If the feature is part of
the actual benefit that consumers wish to purchase when they buy the product,
the feature is functional. However, if the feature serves no purpose other than
as an assurance that a particular entity made, sponsored or endorsed the
product, it is non-functional. 

The middle sentence
misstated the law, because it’s not true that being “part of the actual benefit
that consumers wish to purchase when they buy the product” is sufficient proof
that a feature is functional under Au-Tomotive Gold. The instruction
didn’t capture the utilitarian functionality factors, such that “a feature that
provides a utilitarian benefit is not functional unless the Disc Golf
factors weigh in favor of finding it so,” and it didn’t capture the rule that “a
feature that provides an aesthetic benefit is not functional unless that
benefit is wholly independent of any source-identifying function and the
feature’s protection would put competitors at a significant non-reputation-related
disadvantage.” This error was presumptively harmful, requiring reversal and
remand. 

Comment: As far as I can recall, no court has ever opined on how to determine “significance” for these purposes. Is it qualitative? Quantitative? What increment of non-reputation-related
market share is a trademark claimant entitled to by virtue of having some
reputation-related market share, especially since functionality ordinarily
trumps secondary meaning? With respect to phrases conveying a particularized message such as “Lettuce Turnip the Beet,” our recent amicus brief indicates that the First Amendment interests in conveying such a message are inherently significant. Again, I think there’s a real insight here but the word “significant” isn’t super helpful in implementing it: the mere fact that a design is, aesthetically speaking, decent doesn’t mean that it is aesthetically functional. I have occasionally suggested framing the question as whether, in a counterfactual world in which the plaintiff has no source-related reputation, the design would still have particular attractions beyond “eh, it’s a fine design”; Justin Hughes has suggested looking for a larger tradition or principles, which would often accomplish much the same thing as my test, to protect things that have preexisting associations or meanings, e.g., a champagne container in the shape of a slipper or a heart-shaped chocolate box or a black (slimming) engine for a boat. The Betty Boop case is a good one here because it clarifies the normative nature of the inquiry: given that the copyright in Betty Boop expired, is the ability to compete in the Betty Boop market significant? I think Dastar means that it is, even if other mugs and T-shirts exist at the same price point.

Dilution: requires
federal fame, which means “household name” status. This HM did not prove. The
Ninth Circuit’s earlier Trek case held that Trek failed to show such fame even
though the company spent “between $3 million and $5 million per year” on
advertising, including in mainstream publications; had around 4.5 million
visitors to its website per year; made products sold by over 1,600 independent
dealers in 2,000 locations across the nation; and sponsored superstar Lance
Armstrong, who prominently used Trek bicycles. The court reasoned that
“incidental media coverage,” such as that connected to Lance Armstrong, did not
“by itself constitute evidence” that the mark was famous, because “[m]any
products receive broad incidental media coverage.” Also, “[a]dvertising to a
mass audience is not the same as achieving fame with a mass audience and, by
themselves, such advertisements prove only that Trek desires widespread fame,
not that it has achieved it.” By contrast, “surveys showing that a large
percentage of the general public recognizes the brand, press accounts about the
popularity of the brand, or pop-culture references involving the brand would
provide evidence of fame.” Though Trek was a FTDA case, the TDRA didn’t lower
the standard for fame among the general consuming public. 

HM’s evidence,
viewed in the most favorable light, showed: 

HM spent, on average, $550,000 per year on advertising the Eames chairs
from 2004 through 2015 (and under $400,000 per year from 2004 through 2009);
the Eames chairs appeared in obscure publications such as Contract, Metropolis,
and an “industry publication” called Monday Morning Quarterback; at the time of
trial in 2016, HM had, at the very most, around 875,000 unique followers on
Facebook, Twitter, and Instagram combined; most of the Eames chairs are sold
through a distribution channel consisting of only around 45 independently owned
dealers with 130 locations across the country; and the Eames chairs were “very
heavily” featured in the TV show Mad Men, have appeared in other TV shows and
movies, and have been exhibited at several American museums, including the
Museum of Modern Art and the Henry Ford Museum.

This was plainly
weaker than the Trek evidence, which was legally insufficient. Even if the jury
instructions accurately stated the law, HM didn’t offer evidence sufficient to
allow a reasonable jury to conclude that the Eames trade dress met the standard
for fame. The dissent wanted more leeway for trade dresses than trade names,
but it’s still required that the mark be famous among the general consuming
public as a mark, not just recognizable (e.g., the Statue of Liberty is
famous, but it’s not famous as a mark). “Even assuming that the shape of
the Eames chair is more recognizable than the name ‘Trek,’ there nonetheless
was no basis from which the jury could reasonably infer that the general
consuming public would link all Eames-shaped chairs to a single source of
goods.” 

Judge Friedland, as
mentioned, dissented, relying on the idea that a mark can be a mark even if the
consuming public doesn’t know the identity of the (singular) producer; that HM
was not well known did not mean that the Eames chair was not well known. The
dissent would have held that the jury could “deem HM’s experts credible and …
infer from their testimony that the general consuming public had become
familiar with the Eames chairs through encounters in business environments, pop
culture, and museums.” Because the design was distinctive, the jury could find
that it served as “a signature of chairs made by a leading furniture
manufacturer, even if they could not specifically name HM as that manufacturer.” 

I think the majority
clearly has the better of this because of the difference between being well
known and well known as a mark. 

The dissent rejected
the side-by-side comparison of the facts here with the facts in the Trek case
because it thought there was more evidence here of “actual consumer recognition”
because the Eames chairs are “ubiquitous” in office environments and depicted
in “countless” TV shows and movies. [One could do a very interesting class
analysis of the imagined “general consuming public” here: although Mad Men
was surely culturally significant for us New Yorker types, what portion
of the public was actually exposed to these TV shows and office environments,
or went to the museums that focused on the chair design?] Also, the design here
is “iconic” and museum-worthy while Trek is a “non-distinctive four-letter term
with multiple meanings.” The media coverage wasn’t “incidental” as it was in
the Trek case because the chair was a distinctive product design “that the jury
could have inferred was memorable to many consumers who saw the chairs.” 

Excellent example of
casual empiricism here: “While members of the public can consume products or
encounter advertisements for products without focusing on the marks they
feature, it would be difficult for consumers to interact with a product without
forming an impression of its overall appearance (its dress)—particularly when
that appearance is distinctive.” [I think this is just made up: at least, I don’t
recall any literature suggesting that overall appearance does any better than
any other kind of feature at sticking in a consumer’s mind; like most things we
encounter, most design probably doesn’t go into long-term memory at all, certainly not as source-identifying. And as
a legal matter it’s inconsistent with the Wal-Mart rule that all product
design requires secondary meaning for protection.]

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UL’s interpretation of its own standards is opinion (but not all standards application would be)

Posted on June 25, 2020 by rtushnet

Warren Technology,
Inc. v. UL LLC, — F.3d —-, 2020 WL 3406585, No. 18-14976 (11th Cir. Jun.
22, 2020)

This decision comes
out the right way—a manufacturer’s disagreement with UL’s interpretation of its
own standards doesn’t make UL’s interpretation false—but it also highlights
that the fact/opinion divide is very fraught. 

Warren, which makes
UE heaters (don’t worry about it) for HVAC systems, sued its competitor Tutco
and UL, which is a Nationally Recognized Testing Laboratory accredited by OSHA
to certify products’ compliance with safety standards, including the UL 1995
standard for UE heaters. Warren sued for Lanham Act false advertising and
contributory false advertising, damages under the common law of unfair
competition, and violation of the Florida Deceptive and Unfair Trade Practices
Act. 

“All of Warren’s
claims are based upon its allegation that, despite UL’s having certified
Tutco’s UE heaters as compliant, Tutco’s heaters do not, in fact, comply with
the UL 1995 standard,” because (Warren argued) UL misapplied the standard.

UL must, to do its
OSHA-accredited job, interpret its standards. UL’s resulting authorization to
Tutco to use UL’s mark was not an actionable misrepresentation. Even a
misinterpretation of the UL standard wouldn’t necessarily be a falsehood as
opposed to a matter of opinion, “provided it was made in good faith and in
accordance with OSHA’s criteria for independence, procedural regularity, etc.”
However, in order to limit what counts as opinion, the court indicated that it
would be possible to plead an actionable misrepresentation based on a
miscertification by UL. That could happen if UL failed to meet its own
standards for testing, or interpreted the UL 1995 standard inconsistently over
time, or applied it inconsistently to Warren and Tutco, or lacked independence
relative to Tutco. Interestingly, all but the first of these examples appear to
be the court reasoning from conduct that would invalidate a certification mark.
But why those things (aside from the first) would remove an interpretation from
the category of “opinion” is an interesting question.

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reconsidering, court rules that FDUTPA covers more than Lanham Act “advertising,” reinstates only state claims

Posted on June 19, 2020 by rtushnet

Westgate Resorts,
Ltd. v. Reed Hein & Assoc., LLC, 2020 WL 3265972, No.
6:18-cv-1088-Orl-31DCI (M.D. Fla. Apr. 27, 2020) 

Previously,
the court dismissed Lanham Act false advertising and coordinate state law
claims against timeshare exit purveyors. Here, the court reverses part of its
earlier holding, with respect to non-advertising-based state law claims.
Although courts often say that federal Lanham Act and state law claims are
subject to the same analysis, that is an overstatement; in some circumstances,
state laws are broader.

FDUTPA covers
deceptive acts and practices that go beyond advertising. Westgate alleged that,
once in contact with Westgate timeshare owners, defendants committed “unfair
and deceptive acts and practices” by “instruct[ing] owners of Westgate
timeshare interests to stop making payments of validly assessed maintenance and
taxes, and of legitimately owed note and mortgage payments, to Westgate in
Florida, which damages Westgate.” Owners who started out current on their
payments were allegedly deceived into thinking they could safely exit without
foreclosure and stopped payments at defendant TET’s instruction, when in fact
they defaulted and entered into foreclosure. These allegations were supported
by testimony from customers of TET. This plausibly proximately caused Westgate’s
damages and might entitle Westgate to injunctive relief, even if the conduct was
no longer ongoing. “[A] jury could find that TET engaged in deceptive practices
by guaranteeing owners that it could legitimately exit them from their
timeshare interests and instructing those same owners to stop making payments
to Westgate, knowing that it would not actually negotiate with Westgate, that
Westgate would likely foreclose, and that TET would simply claim that it had
successfully ‘terminated’ the owners’ timeshare interests without disclosing
the foreclosure.”

 

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restitution unavailable in fed ct if damages are adequate, even for Cal. state law claims

Posted on June 19, 2020 by rtushnet

Sonner v. Premier
Nutrition Corporation, — F.3d —-, 2020 WL 3263043, No. 18-15890 (9th Cir.
Jun. 17, 2020) 

The court explains: 

On the brink of trial after more than four years of litigation [over
allegedly false advertising of “Joint Juice”], Plaintiff-Appellant Kathleen
Sonner voluntarily dismissed her sole state law damages claim and chose to
proceed with only state law equitable claims for restitution and injunctive
relief. A singular and strategic purpose drove this maneuver: to try the class
action as a bench trial rather than to a jury. Indeed, Sonner continued to seek
$32,000,000 on behalf of the consumers she represented, but as equitable
restitution rather than as damages. But, to Sonner’s dismay, the plan backfired
when, relying on its interpretation of California law, the district court dismissed
her claims for restitution because an adequate remedy at law, i.e., damages,
was available.

Affirmed, because federal
courts have to apply equitable principles derived from federal common law, even
to state law UCL/CLRA claims for equitable restitution. It doesn’t matter that
state courts might do otherwise and that this creates state/federal divergence
in results.  In modern times, the Supreme
Court “has never held or suggested that state law can expand a federal court’s
equitable powers, even if allowing such expansion would ensure a similar
outcome between state and federal tribunals.”

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Amicus in Lettuce Turnip the Beet

Posted on June 19, 2020 by rtushnet

With the much-valued assistance of Venkat Balasubramani, Mark McKenna & I have put together a law professors’ brief in the LTTB case, which raises important issues about the scope of a trademark registration and aesthetic functionality.  Read it here.

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Copyright Society panel on fair use (Warhol, Seuss, Oracle)

Posted on June 18, 2020 by rtushnet

CSUSA Fair Use panel

Jennifer Pariser, MPA

Joseph Salvo, Sesame Workshop

Rebecca Tushnet

II.  Discussion of Three Notable Fair Use Cases
Currently on Appeal

A.    Dr.
Seuss Enterprises v. ComicMix,
372 F. Supp. 3d 1101 (S.D. Cal. 2019)Q&A:            The
MPA and Sesame Workshop filed amicus briefs in support of Dr. Seuss
Enterprises, and Professor Tushnet filed an amicus brief in support of Comic
Mix.

Salvo: Sesame has
done parodies in the past, but came in on DSE’s side here. Fair use is
unpredictable, but there are a number of factors. This case in our view
departed substantially from preexisting law. Court seemed to give a brand new
rule for mashups. Obviated discussion of amount/substantiality of taking and
market harm. Other thing was court looked past blatantly commercial nature of D’s
work.  Also there was a lot of slavish
copying: illustrator tried to go as close as possible, as did rhyming scheme.
Finally, harm: fair use is an affirmative defense. District court also
conflated derivative work transformativeness with fair use transformativeness,
negating the derivative work right.

RT: 9th Circuit
has already held that fair use is a defense, but not an affirmative defense. It
negates infringement rather than excusing it according to the statute’s own
terms. And since we are all textualists now we have to expect that the words of
the statute will have a different effect than in the past when it gets to the
Supreme Court.

Transformativeness
is and should be a broad concept. Sesame is the best example of this. My own
memory includes a Sesame book that just tosses off “isn’t it good, Norwegian
wood” as monsters are eating furniture. That was just funny; it didn’t constitute
criticism of the Beatles. Sesame Street’s own mashups also usually do a
separate thing, like teach counting, rather than expressly comment on an adult
show. That’s not different from Boldly Go, which contrasts Star Trek’s communality
to The Places You’ll Go’s individualism (something that was recognized in the
literature long before Boldly Go; David Brooks even
has a column about it, believe it or not).

Commerciality: ©
plaintiffs are hoist on their own petard here. Having convinced courts that
everything that gets litigated is commercial use, they have generated the
doctrine that says that commerciality isn’t super important to most fair use
cases.

Copying of each
illustration v. copying a substantial amount of a work. This also comes up in
Google v. Oracle: if © owner can slice its works into a large number of
microworks, it can manipulate and distort the analysis, not just for fair use
but for substantial similarity.

Why factor three
rarely matters in transformative purpose cases: it doesn’t matter to meaning
and it doesn’t matter to markets. If there’s transformation, you can take what
is artistically important to you: pride in your own work as an artist is a good
enough reason to do a good job, if you are creating something with new meaning and
purpose. And that’s why the court’s comparison to the Liebovitz case was such a
good one: in that case there was artistically exact copying of Annie Liebovitz’s
photo in order to make the Naked Gun 33 1/3 poster a better poster. But because
of the transformation of meaning and lack of impact on the market, the
exactness of the copying didn’t change the outcome.

DSE had not
licensed mashups; that’s a misdescription of the record, which showed only that
the Grinch had appeared as a playable character in a game called Panda Pop; he
didn’t interact with or have distinct powers in that game; he was basically a “skin”
for the player character.

B.    Andy
Warhol Foundation for Visual Arts v. Goldsmith (S.D.N.Y 2019)

Q: Professor Tushnet, can you speak to this
idea as it relates to the Warhol v.
Goldsmith case and your amicus brief specifically, and also as it relates
to any other recent cases in which the focus may or may not have been,
incorrectly, on fair use? 

The core argument
of our brief: No matter what its purpose or effect on the market, a work that is
not substantially similar in its use of copyrightable elements from the
original simply does not infringe. Holding such instances to be fair use may
mitigate the damage, but it makes the fair use doctrine more complicated and
implicitly suggests that the defendants in such cases did take enough to
infringe, which encourages future plaintiffs to try their luck with aggressive
copyright claims.

Here, the
overlapping visual elements between the two works stemmed from the appearance
of Prince’s face and the nature of a close up image of a face; those are
unprotectable, so similarity in only those things isn’t substantial similarity.

Fair use is
intellectually more fun and it’s easier to have a discussion about bigger
principles, but it’s not great to have it as the only tool in the basket.
Similar cases include a case about a William Faulkner quote, when the Faulkner
estate sued over a Woody Allen movie that used part of the quote, as well as
the Seventh Circuit case of Kienitz v. Sconnie Nation. If we paid more attention
to substantial similarity, we wouldn’t have as many hard fair use cases.

Pariser: agree
that where that’s true, it’s bad to assess the issue on fair use grounds, but
disagrees that’s the case in Warhol. Substantial similarity is usually
discussed when there hasn’t been straight duplication of the senior work:
instead, reproduced elements of the senior user, not made a straight copy on
the photocopy machine. Tremendous burden to overcome the idea you didn’t take
very much when you made a literal copy. Decision relies too much on Warhol’s
popularity/fame as transforming the meaning of the picture.

On whom is the
burden of showing market harm (also comes up in Seuss): a challenge in all fair
use cases. The facts were too weak for Goldsmith on the fourth factor here.

Salvo: Fair use is
fact sensitive. The fact that it was Warhol seems to have been magic/talismanic
protection. © owners have the right to say no to licensing. As a brand owner,
when you choose to associate w/another brand is important.

[RT: Things I didn’t
have time to say: The switch to brand language is super important as a signal
of an underlying issue that needs resolution: how much will ©/TM be separated,
and will TM considerations count in © cases? Dastar is an important case
here. Completely agree that relying on Warhol’s fame is problematic. As to
literal copying, the doctrine is very clear that copying in fact is ok if you
don’t create a substantially similar work. Even if Warhol did make a photocopy,
which is unclear from the record, the things w/in the statute of limitations
are not substantially similar. A full face shot is not itself creative and the
way his face looks is a fact; the record unsurprisingly contains a number of
photos of Prince staring at the camera in a hard to distinguish way.]

C.    Google
v. Oracle, (N.D. Cal. and
Fed. Cir. 2012-present)

Q&A:  For this discussion, we will leave aside the
important question of the protectability of the APIs and focus on the question
of fair use, but specifically, whether it was correct for the Federal Circuit
to overturn the jury’s fair use finding.  

Role of appellate
court in assessing jury verdict in © case: Feltner: right to jury for all
issues relevant to making an award of statutory damages. But that proves too
much. Everything goes to the jury in making an award of statutory damages. Harper
& Row: courts of appeal can review district court findings of fair use as a
matter of law. A lot of courts have decided they can review all fair use
findings de novo, but this has only rarely happened b/c many fair use cases are
decided on sj. Rarity of overturning jury verdict doesn’t mean doing so is
incorrect. If courts can assess fair use as a matter of law, they can review it
de novo. Critics of the outcome point to the issue that the jury didn’t make
any specific findings of fact; how can we review that de novo? But the obverse
doesn’t work either: if there are no findings of fact by the jury, that doesn’t
mean the jury gets more deference. Lack of findings should worry us more. Weird
system in which juries make broad rulings entitled to some amount of deference.
Legal/practical perspective: review the legal aspects de novo. Can disagree
about Fed Cir’s legal analysis, but if we’re just zeroing in on de novo review,
thinks their ability to do so did exist.

RT: We have a a
lot of jurisprudence about this; could a reasonable jury applying the correct
law have reached this verdict? Prediction, which I rarely make: Supreme Court
is going to decide this on non-© principles; it will try to figure out whether
fair use was equitable in the 18th century and make up a presentist answer,
given that fair use is not like the 18th century analogues/ancestors. My
unsatisfying answer: it’s a mixed Q of law & fact. Market harm: pretty
factual, and the Fed Cir intervened in an unjustified way there.
Transformativeness: pretty legal. Commerciality as it is presently understood:
pretty legal.

Q: if fair use is highly
fact dependent, then that seems relevant.

Salvo: Not a tech
person. Fed Cir seemed bothered by commerciality and market harm. Of note: what
passes as permissible in visuals might not for music; for documentaries v. print
publishing. In music it may be 3-4 notes. Different standards for different
industries make comparisons difficult.

Q: contrast Cat
Not in the Hat: Commentary on something other than Seuss lost. Is it a
different fact pattern or have litigants learned to argue differently?

Pariser: ComicMix
doesn’t even cite Not in the Hat; shows weakness of analysis.

RT: Different fact
pattern and litigants have learned to argue differently. Subsequent Green Day
case is more relevant; earlier Cat in the Hat case argued only parody.

Q: how does the
Warhol case reflect back on the earlier Shepherd Fairey/Hope case?

RT: same issues!

Salvo: Koons also
lost some cases until he/his lawyers convinced the courts that his view of art
was correct.

Q: Mashups of
music?

Pariser: same
issues; which is why mashups shouldn’t get special deference. If there’s no
lyrics in a sound track, it’s harder to show transformativeness. Marrying two
disparate things together isn’t necessarily fair.

Salvo: first
sampling cases; courts very strict in finding use of preexisting musical
works/recordings were infringement. Robust licensing regime evolved. For brands,
licensing is the solution here.

[RT: (1) racial
bias in music case outcome v. visual work outcome, not understanding the
language in which Black musicians were speaking (Bleistein). (2) TM
concepts/Dastar issues.]

Q: why should DSE’s
failure to license mashups matter if other entities do license mashups?

Salvo: they
shouldn’t. Right to control subsequent use in derivative markets is important.
We curate our brands.

Q: does the codification
of fair use preclude equitable fair use that requires witholding injunction/profits
but requiring payment of reasonable royalty?

Salvo: Congress
said what to do.

RT: Twice: Tasini
& the Rear Window case—has been suggested; interesting Q why more lower courts
haven’t taken the Court up on the invitation.

Q: how do you
reverse jury findings w/o examination of jury instructions?

Pariser: you do
need to do both. Fed Cir started w/the Q of whether the district court’s
understanding of the law of fair use was correct; didn’t say it explicitly but
that must mean whether the court gave the jury the right factors to consider. Could
remand to do it again if they weren’t right to take another whack. [As the Q
suggests, of course, the Fed Cir didn’t actually do that.]  Fed Cir must have at least implicitly
considered whether a remand would be a cleaner way of skinning this particular
cat.

Q: has transformative
use gone too far?

Pariser: of
course!

RT: of course not!

Salvo: depends,
leans towards Pariser. Courts have seized on transformativeness as alpha and
omega, and that’s not right.

Pariser: that was
our amicus in Oracle: whatever else you do, Court, don’t reverse on transformativeness.
Google’s articulation of transformativeness was that they had a new product that
was great. Our brief argues that you have to look at whether the © work was
used in a transformative way.

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Copyright Society panel on fair use (Warhol, Seuss, Oracle)

Posted on June 18, 2020 by rtushnet

CSUSA Fair Use panel

Jennifer Pariser, MPA

Joseph Salvo, Sesame Workshop

Rebecca Tushnet

II.  Discussion of Three Notable Fair Use Cases
Currently on Appeal

A.    Dr.
Seuss Enterprises v. ComicMix,
372 F. Supp. 3d 1101 (S.D. Cal. 2019)Q&A:            The
MPA and Sesame Workshop filed amicus briefs in support of Dr. Seuss
Enterprises, and Professor Tushnet filed an amicus brief in support of Comic
Mix.

Salvo: Sesame has
done parodies in the past, but came in on DSE’s side here. Fair use is
unpredictable, but there are a number of factors. This case in our view
departed substantially from preexisting law. Court seemed to give a brand new
rule for mashups. Obviated discussion of amount/substantiality of taking and
market harm. Other thing was court looked past blatantly commercial nature of D’s
work.  Also there was a lot of slavish
copying: illustrator tried to go as close as possible, as did rhyming scheme.
Finally, harm: fair use is an affirmative defense. District court also
conflated derivative work transformativeness with fair use transformativeness,
negating the derivative work right.

RT: 9th Circuit
has already held that fair use is a defense, but not an affirmative defense. It
negates infringement rather than excusing it according to the statute’s own
terms. And since we are all textualists now we have to expect that the words of
the statute will have a different effect than in the past when it gets to the
Supreme Court.

Transformativeness
is and should be a broad concept. Sesame is the best example of this. My own
memory includes a Sesame book that just tosses off “isn’t it good, Norwegian
wood” as monsters are eating furniture. That was just funny; it didn’t constitute
criticism of the Beatles. Sesame Street’s own mashups also usually do a
separate thing, like teach counting, rather than expressly comment on an adult
show. That’s not different from Boldly Go, which contrasts Star Trek’s communality
to The Places You’ll Go’s individualism (something that was recognized in the
literature long before Boldly Go; David Brooks even
has a column about it, believe it or not).

Commerciality: ©
plaintiffs are hoist on their own petard here. Having convinced courts that
everything that gets litigated is commercial use, they have generated the
doctrine that says that commerciality isn’t super important to most fair use
cases.

Copying of each
illustration v. copying a substantial amount of a work. This also comes up in
Google v. Oracle: if © owner can slice its works into a large number of
microworks, it can manipulate and distort the analysis, not just for fair use
but for substantial similarity.

Why factor three
rarely matters in transformative purpose cases: it doesn’t matter to meaning
and it doesn’t matter to markets. If there’s transformation, you can take what
is artistically important to you: pride in your own work as an artist is a good
enough reason to do a good job, if you are creating something with new meaning and
purpose. And that’s why the court’s comparison to the Liebovitz case was such a
good one: in that case there was artistically exact copying of Annie Liebovitz’s
photo in order to make the Naked Gun 33 1/3 poster a better poster. But because
of the transformation of meaning and lack of impact on the market, the
exactness of the copying didn’t change the outcome.

DSE had not
licensed mashups; that’s a misdescription of the record, which showed only that
the Grinch had appeared as a playable character in a game called Panda Pop; he
didn’t interact with or have distinct powers in that game; he was basically a “skin”
for the player character.

B.    Andy
Warhol Foundation for Visual Arts v. Goldsmith (S.D.N.Y 2019)

Q: Professor Tushnet, can you speak to this
idea as it relates to the Warhol v.
Goldsmith case and your amicus brief specifically, and also as it relates
to any other recent cases in which the focus may or may not have been,
incorrectly, on fair use? 

The core argument
of our brief: No matter what its purpose or effect on the market, a work that is
not substantially similar in its use of copyrightable elements from the
original simply does not infringe. Holding such instances to be fair use may
mitigate the damage, but it makes the fair use doctrine more complicated and
implicitly suggests that the defendants in such cases did take enough to
infringe, which encourages future plaintiffs to try their luck with aggressive
copyright claims.

Here, the
overlapping visual elements between the two works stemmed from the appearance
of Prince’s face and the nature of a close up image of a face; those are
unprotectable, so similarity in only those things isn’t substantial similarity.

Fair use is
intellectually more fun and it’s easier to have a discussion about bigger
principles, but it’s not great to have it as the only tool in the basket.
Similar cases include a case about a William Faulkner quote, when the Faulkner
estate sued over a Woody Allen movie that used part of the quote, as well as
the Seventh Circuit case of Kienitz v. Sconnie Nation. If we paid more attention
to substantial similarity, we wouldn’t have as many hard fair use cases.

Pariser: agree
that where that’s true, it’s bad to assess the issue on fair use grounds, but
disagrees that’s the case in Warhol. Substantial similarity is usually
discussed when there hasn’t been straight duplication of the senior work:
instead, reproduced elements of the senior user, not made a straight copy on
the photocopy machine. Tremendous burden to overcome the idea you didn’t take
very much when you made a literal copy. Decision relies too much on Warhol’s
popularity/fame as transforming the meaning of the picture.

On whom is the
burden of showing market harm (also comes up in Seuss): a challenge in all fair
use cases. The facts were too weak for Goldsmith on the fourth factor here.

Salvo: Fair use is
fact sensitive. The fact that it was Warhol seems to have been magic/talismanic
protection. © owners have the right to say no to licensing. As a brand owner,
when you choose to associate w/another brand is important.

[RT: Things I didn’t
have time to say: The switch to brand language is super important as a signal
of an underlying issue that needs resolution: how much will ©/TM be separated,
and will TM considerations count in © cases? Dastar is an important case
here. Completely agree that relying on Warhol’s fame is problematic. As to
literal copying, the doctrine is very clear that copying in fact is ok if you
don’t create a substantially similar work. Even if Warhol did make a photocopy,
which is unclear from the record, the things w/in the statute of limitations
are not substantially similar. A full face shot is not itself creative and the
way his face looks is a fact; the record unsurprisingly contains a number of
photos of Prince staring at the camera in a hard to distinguish way.]

C.    Google
v. Oracle, (N.D. Cal. and
Fed. Cir. 2012-present)

Q&A:  For this discussion, we will leave aside the
important question of the protectability of the APIs and focus on the question
of fair use, but specifically, whether it was correct for the Federal Circuit
to overturn the jury’s fair use finding.  

Role of appellate
court in assessing jury verdict in © case: Feltner: right to jury for all
issues relevant to making an award of statutory damages. But that proves too
much. Everything goes to the jury in making an award of statutory damages. Harper
& Row: courts of appeal can review district court findings of fair use as a
matter of law. A lot of courts have decided they can review all fair use
findings de novo, but this has only rarely happened b/c many fair use cases are
decided on sj. Rarity of overturning jury verdict doesn’t mean doing so is
incorrect. If courts can assess fair use as a matter of law, they can review it
de novo. Critics of the outcome point to the issue that the jury didn’t make
any specific findings of fact; how can we review that de novo? But the obverse
doesn’t work either: if there are no findings of fact by the jury, that doesn’t
mean the jury gets more deference. Lack of findings should worry us more. Weird
system in which juries make broad rulings entitled to some amount of deference.
Legal/practical perspective: review the legal aspects de novo. Can disagree
about Fed Cir’s legal analysis, but if we’re just zeroing in on de novo review,
thinks their ability to do so did exist.

RT: We have a a
lot of jurisprudence about this; could a reasonable jury applying the correct
law have reached this verdict? Prediction, which I rarely make: Supreme Court
is going to decide this on non-© principles; it will try to figure out whether
fair use was equitable in the 18th century and make up a presentist answer,
given that fair use is not like the 18th century analogues/ancestors. My
unsatisfying answer: it’s a mixed Q of law & fact. Market harm: pretty
factual, and the Fed Cir intervened in an unjustified way there.
Transformativeness: pretty legal. Commerciality as it is presently understood:
pretty legal.

Q: if fair use is highly
fact dependent, then that seems relevant.

Salvo: Not a tech
person. Fed Cir seemed bothered by commerciality and market harm. Of note: what
passes as permissible in visuals might not for music; for documentaries v. print
publishing. In music it may be 3-4 notes. Different standards for different
industries make comparisons difficult.

Q: contrast Cat
Not in the Hat: Commentary on something other than Seuss lost. Is it a
different fact pattern or have litigants learned to argue differently?

Pariser: ComicMix
doesn’t even cite Not in the Hat; shows weakness of analysis.

RT: Different fact
pattern and litigants have learned to argue differently. Subsequent Green Day
case is more relevant; earlier Cat in the Hat case argued only parody.

Q: how does the
Warhol case reflect back on the earlier Shepherd Fairey/Hope case?

RT: same issues!

Salvo: Koons also
lost some cases until he/his lawyers convinced the courts that his view of art
was correct.

Q: Mashups of
music?

Pariser: same
issues; which is why mashups shouldn’t get special deference. If there’s no
lyrics in a sound track, it’s harder to show transformativeness. Marrying two
disparate things together isn’t necessarily fair.

Salvo: first
sampling cases; courts very strict in finding use of preexisting musical
works/recordings were infringement. Robust licensing regime evolved. For brands,
licensing is the solution here.

[RT: (1) racial
bias in music case outcome v. visual work outcome, not understanding the
language in which Black musicians were speaking (Bleistein). (2) TM
concepts/Dastar issues.]

Q: why should DSE’s
failure to license mashups matter if other entities do license mashups?

Salvo: they
shouldn’t. Right to control subsequent use in derivative markets is important.
We curate our brands.

Q: does the codification
of fair use preclude equitable fair use that requires witholding injunction/profits
but requiring payment of reasonable royalty?

Salvo: Congress
said what to do.

RT: Twice: Tasini
& the Rear Window case—has been suggested; interesting Q why more lower courts
haven’t taken the Court up on the invitation.

Q: how do you
reverse jury findings w/o examination of jury instructions?

Pariser: you do
need to do both. Fed Cir started w/the Q of whether the district court’s
understanding of the law of fair use was correct; didn’t say it explicitly but
that must mean whether the court gave the jury the right factors to consider. Could
remand to do it again if they weren’t right to take another whack. [As the Q
suggests, of course, the Fed Cir didn’t actually do that.]  Fed Cir must have at least implicitly
considered whether a remand would be a cleaner way of skinning this particular
cat.

Q: has transformative
use gone too far?

Pariser: of
course!

RT: of course not!

Salvo: depends,
leans towards Pariser. Courts have seized on transformativeness as alpha and
omega, and that’s not right.

Pariser: that was
our amicus in Oracle: whatever else you do, Court, don’t reverse on transformativeness.
Google’s articulation of transformativeness was that they had a new product that
was great. Our brief argues that you have to look at whether the © work was
used in a transformative way.

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