Rebecca Tushnet

“better lives for hens” was puffery, but hen living conditions claims weren’t

Posted on March 3, 2020 by rtushnet

Lugones v. Pete & Gerry’s Organic, LLC, No. 19 Civ. 2097
(KPF), 2020 WL 871521 (S.D.N.Y. Feb. 21,
2020

Plaintiffs alleged that they bought defendant’s eggs,
branded as Nellie’s Free Range Eggs, based on false advertisements indicating
that the hens were loved and are given ample access to open, green spaces in
which they can peck, perch, and play. Instead, (i) defendant’s hens are
allegedly kept in tightly constricted spaces, with no real access to the
outdoors; they are crammed “into sheds up to 20,000 at a time … prevent[ing]
them from extending their wings, foraging or making their way to the outdoor
space [Defendant] advertises so prominently”, and (ii) the hens are subject to
numerous husbandry practices that plaintiffs oppose, such as beak-cutting and culling
for slaughter when they’re calcium-depleted.

The containers used slogans like “we love our hens, you’ll
love our eggs”; “we love our hens”; “better lives for hens mean better eggs for
you!”; and “outdoor forage.” The container also claimed that “[m]ost hens don’t
have it as good as Nellie’s,” because Nellie’s hens “can peck, perch, and play
on plenty of green grass.” The containers all included imagery highlighting
young children playing with hens in an open field.

Plaintiffs alleged they “would only consider purchasing
Nellie’s eggs in the future if Defendant[ ] were to treat chickens in a manner
consistent with [its] advertising.” The court held this conditional intent wasn’t
enough to give them standing to pursue injunctive relief.

However, plaintiffs did state claims under GBL §§ 349 and
350, based only on statements and images they claimed to have viewed before
purchase: the statements and images on the container, including this paragraph:

Most hens don’t have it as good as
Nellie’s. 9 out of 10 hens in the U.S. are kept in tiny cages at giant egg
factories housing millions of birds. Sadly, even “cage-free” is now being used
to describe hens that are crowded into large, stacked cages on factory farms,
who never see the sun. Nellie’s small family farms are all Certified Humane
Free-Range. Our hens can peck, perch, and play on plenty of green grass.

Statements on the website, however, were non-actionable
because plaintiffs didn’t allege that they viewed the website before purchasing
and thus they couldn’t have relied on those statements.

Also, many of the challenged parts of the container were not
actionable. “We love our hens, you’ll
love our eggs” and “better lives for hens mean better eggs for you” were “paradigmatic
examples of puffery.” It was unreasonable to interpret such statements to mean
that the hens were free “from chick culling, beak-cutting, calcium depletion[,]
and sale to commercial slaughterhouses and live markets.” But “[m]ost hens don’t have it as good as
Nellie’s. … Our hens can peck, perch, and play on plenty of green grass” was
factual, reinforced by references to “OUTDOOR FORAGE” and images of hens
frolicking in elysian pastures. There was enough specificity to go beyond
puffery and into potential materiality. Defendants argued that reasonable
consumers wouldn’t rely on these claims, but that wasn’t a good argument on a
motion to dismiss: the court wasn’t willing to find as a matter of law that
consumers wouldn’t look at these claims and the associated iamges “and not
believe that Defendant’s hens have significant access to the outdoors.”

Fraud/fraudulent misrepresentation claims likewise survived.
When it came to reasonable reliance, “Plaintiffs would have had no independent means
of ascertaining the truth of Defendant’s misrepresentations — short of driving
themselves to Defendant’s facilities and sleuthing about the grounds for the
truth. Such an effort would go far beyond the ‘minimal diligence’” required.”
But breach of express warranty claims failed.

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Cal. court says “controversial” claim is therefore not factual

Posted on March 3, 2020 by rtushnet

Serova v. Sony Music Entertainment, 44 Cal.App.5th 103 (2020)

Hard to believe the reasoning
in this case could get worse, but they may have achieved it. The California
Supreme Court told the court of appeals to reconsider its earlier decision in
light of FilmOn.com Inc. v. DoubleVerify Inc., 439 P.3d 1156 (Cal. 2019). Same result, slightly different reasoning: Because
there is a dispute over the vocalist on certain recordings advertised as
“Michael Jackson” recordings, this is a “controversial” question that therefore
cannot be factual for purposes of commercial speech doctrine. In fairness to
the court of appeals, this is a known problem of using “controversial” as a
standard in a lawsuit over compelled commercial speech, where there is by
definition a controversy. I’m not even strongly committed to this decision
being wrong on the merits given the special context of an entertainment product.
But it is a bad sign of where First Amendment cases are going: disclosure cases are now contaminating ordinary falsity cases.

Serova alleged that the album cover and a promotional video
wrongly represented that Jackson was the lead singer on each of the 10 vocal
tracks on the album, when in fact he was not the lead singer on three of those
tracks. Previously, the court of appeals held that: (1) Serova’s claims arose from
conduct furthering Appellants’ right of free speech “in connection with a
public issue” under the anti-SLAPP law; and (2) Serova did not show a
probability that her claims under the UCL and the CLRA would succeed because
the claims concern noncommercial speech that is not actionable under those
statutes.

Reaffirming its earlier reasoning, the court of appeals
concluded that FilmOn concerned only the first step of the anti-SLAPP analysis,
i.e., whether particular claims arise from conduct that the anti-SLAPP statute
protects. Specifically, FilmOn considered “whether the commercial nature of a
defendant’s speech is relevant in determining whether that speech merits
protection” under the anti-SLAPP law, and concluded that the context of a statement—including
“the identity of the speaker, the audience, and the purpose of the speech” —is
“relevant, though not dispositive, in analyzing whether the statement was made
‘in furtherance of’ free speech ‘in connection with’ a public issue.”

Here, the representations that Michael Jackson was the lead
singer on the three disputed tracks “did not simply promote sale of the album,
but also stated a position on a disputed issue of public interest.” Before the
album was released, “certain Jackson family members and others publicly claimed
that Jackson was not the lead singer,” while the Estate made a public statement
about the authenticity, making the identity of the artist “a controversial
issue of interest to Michael Jackson fans and others who care about his musical
legacy.” Sony’s financial interest in authenticity
didn’t change that.

This case arguably falls within an exception to an exception:
the legislature amended the anti-SLAPP law to exclude commercial speech, but then
excluded ads for “any dramatic, literary, musical, political, or artistic work”
from that exclusion. Still, the court reasoned, that didn’t mean that all such
ads were necessarily within the scope of the anti-SLAPP law. There still needs
to be some connection to a “public issue” or an “issue of public interest”;
otherwise, an ad falsely claiming that a musical album contains a particular
song would be covered by the anti-SLAPP law.

In FilmOn, the state Supreme Court held that a court
must consider the context as well [as] the content of a statement in
determining whether that statement furthers the exercise of constitutional
speech rights in connection with a matter of public interest.” FilmOn alleged
disparaging statements about the Web-based entertainment programming
distributed by FilmOn.com by defendant’s confidential reports to paying clients
classifying FilmOn Web sites under categories of sites that engage in copyright
infringement and contain “adult content.” The court held that these reports
were not “ ‘in connection with’ ” an issue of public interest. It was “ ‘not
enough that the statement refer to a subject of widespread public interest; the
statement must in some manner itself contribute to the public debate.’ ”

Here, the issue of public interest was whether Michael Jackson
was in fact the singer on the three tracks. And the issue doesn’t simply
concern some trivial fact about his life, but relates to his artistic legacy;
the dispute was of widespread interest among Michael Jackson fans. This public
controversy distinguished this case from other cases about allegedly misleading
descriptions of a particular commercial product or service.

The connection between the issue and the speech is also
relevant. The speaker and the audience for the statements at issue suggested a
commercial purpose: appellants sell the album, and they made the statement to
an audience of potential purchasers. But the content still was not merely
commercial speech, and anyway FilmOn was clear that “[s]ome commercially
oriented speech will, in fact, merit anti-SLAPP protection.” The content of the
statements related directly to the issue of public interest, rather than being
tangentially connected through a generalization of the statements’ subject
matter (the “‘synedoche theory’ of public interest”); cf.
Commonwealth Energy Corp. v. Investor Data Exchange, Inc. (2003) 110
Cal.App.4th 26, 34, 1 Cal.Rptr.3d 390 [“The part is not synonymous with the
whole. Selling an herbal breast enlargement product is not a disquisition on alternative
medicine”].) Even though the challenged statements didn’t
refer to the controversy, they took a position on that controversy. Unlike the statements in FilmOn, the
statements here were public and contributed to the public conversation.

It was also relevant that Sony wasn’t selling “a typical
consumer product” but rather a product that is itself subject to First
Amendment protection. “[T]he challenged conduct in this case helped shape the
experience of the music that consumers purchased,” which was indeed the basis for
Serova’s complaint. Without anti-SLAPP protection, Sony might have decided not
to sell the disputed tracks at all; others might decide not to include songs or
other artistic works with disputed provenance in a collection “rather than
either (1) risk the expense of consumer litigation, or (2) dilute their marketing
by acknowledging doubts about the provenance of the work that they do not
share.” That would discourage protected speech.

Then, Serova couldn’t show a probability of success because
the UCL and CLRA apply only to commercial speech. Again, the speaker and the
intended audience suggested a commercial purpose. But the content of the
challenged speech was “critically different” from purely commercial speech for
two reasons: (1) Sony’s statements “concerned a publicly disputed issue about
which they had no personal knowledge” and (2) “the statements were directly
connected to music that itself enjoyed full protection under the First
Amendment.”

Personal knowledge matters because one reason commercial
speech receives less constitutional protection than political speech is its
greater verifiability. In Nike v. Kasky, the California Supreme Court “ascribed
great significance to the fact that, ‘[i]n describing its own labor policies,
and the practices and working conditions in factories where its products are
made, Nike was making factual representations about its own business
operations.”” Thus, “Nike was in a position to readily verify the truth of any
factual assertions it made on these topics,” and that commercial regulation was
“unlikely to deter Nike from speaking truthfully or at all about the conditions
in its factories.” [Important note: not its factories. The factories were owned
by subcontractors.] Here, by contrast, Sony’s representations about the
identity of the lead singer didn’t concern its own business operations or a
fact of which it had personal knowledge. Other defendants, not the Sony defendants,
allegedly “jointly created, produced, and recorded the initial versions” of the
tracks, so the vital element of personal knowledge was missing. The court of
appeals commented that Kasky might well have come out differently “if
the statements at issue concerned the labor practices of an independent commercial
supplier who simply sold products to Nike for resale,” whereas the Kasky court
specifically noted that Nike had entered into a memorandum of understanding
assuming responsibility for its subcontractors’ compliance with local labor
laws. [Assuming responsibility is not the same thing as having personal
knowledge, by the way.]

Without personal knowledge, Sony’s statements didn’t fit
into the definition of speech that is “ ‘less likely to be chilled by proper
regulation,’ ” given the strict liability of consumer protection law. Personal knowledge about the content of
speech is “an important feature” in determining whether speech is commercial. Without
direct involvement in the recording, from Sony’s perspective, its statements
about the identity of the lead singer “were therefore necessarily opinion.”
Appellants “could only draw a conclusion about that issue from their own
research and the available evidence.” Thus, Sony’s representations about the
identity of the singer were just statements of opinion.

To avoid potential liability, it would have had to put a
disclaimer on the album or leave the songs off entirely. The second option
shows a chilling effect, and the first option is also constitutionally dubious
because compelled commercial speech is a First Amendment problem, as shown by National
Institute of Family & Life Advocates v. Becerra, ––– U.S. ––– (2018), which in response to Breyer’s dissent
stated that it accepted [only] “the legality of … purely factual and
uncontroversial disclosures about commercial products.” Here, any compelled
disclosure would not be “uncontroversial” by definition because “controversy
has surrounded” the disputed tracks, and it wouldn’t be “purely factual” from
Sony’s perspective because it lacked personal knowledge of the facts. Forcing
Sony to put a claim in its advertising materials with which it doesn’t agree would
be bad compelled commercial speech. Even a statement about uncertainty “implies
the existence of real controversy or doubt about the identity of the singer
even though Appellants might not believe that any reasonable doubt exists.” [Although
Sony doesn’t actually know, according to the court of appeals, so the basis of
its certainty is … an interesting question.]

Aaaaaaaaargh. The epistemological confusion here is so deep it’s
more like rot. Sony doesn’t have “personal”
knowledge because it is a corporation and does not “know” anything. Imputing
knowledge to a corporation serves many functions, but it’s distracting rather
than helpful here. If we took this
concept seriously for commercial speech purposes—which, to be clear, we
absolutely should not—then the companies selling quack autism cures are exempt
from regulation precisely to the extent that they are ignorantly or avariciously
parroting claims from bogus anti-scientific literature and didn’t do the
research themselves.

This whole thing is not even a correct description of Kasky!
Nike didn’t have “personal knowledge” of conditions in the factories of its
subcontractors because it had made the business decision to set itself up in a
way that offloaded risk and control to its subcontractors. Subcontractors are
independent third parties. That was the point. Nike had hired other third parties to
monitor, but even if those third parties had “personal knowledge” of the conditions,
Nike still didn’t, by the exact same logic that is in play in this decision.

The imposition of strict liability for factual claims made
to sell products should not depend on—and never has before depended upon—the
corporate form a company has chosen to adopt, which by the way is usually unknown to
consumers. Nike and Sony both decided to
have certain tasks performed outside the boundaries of the corporation; they
did so for reasons that are doubtless well-founded in economics, but should not
be encouraged by the structure of false advertising law—especially since, if
corporations do take advantage of this new rule, there will often be no one to hold
liable for resulting falsity. For example, ingredient suppliers don’t engage in
“advertising” to the public, and the sellers of the final product won’t have
personal knowledge of whether the ingredients are truly the ingredients. The
ingredients list on the product will therefore, according to the reasoning of the
court of appeals here, merely be the seller’s “opinion” about the ingredients. Contrary to what the court of appeals says,
what is “purely factual” should not be and never before has been measured by
the “perspective” of the advertiser.

That’s not even getting into the invited error around
controversiality/disclosure precedents. Under this interpretation, an
advertiser seems to get to create controversy by disagreeing with the
regulator, at least if the advertiser has enough market power to get its voice
heard.

But even if you think that “controversial” serves an
important purpose in mandatory disclosure situations, the court of appeals’
reasoning here has turned every deception case into a mandatory disclosure case,
which makes no sense. Consider: the
shark cartilage seller wants to advertise that shark cartilage cures cancer.
The regulator says: no, that’s false. The
seller says: now my choices are to not sell shark cartilage or to put a disclaimer
on my shark cartilage saying it doesn’t cure cancer, and that’s bad compelled
speech about a controversial subject! Those
are the exact choices Sony has. But if a commercial speaker is saying something
false, those are legitimate choices to put it to—shut up and stop fooling
people, or say something true instead—even if it believes its own claims.

All the real work in this case is being done by the idea
that the factuality of “Michael Jackson sang this” is of a different order/regulability
than the factuality of “shark cartilage cures cancer” because of the former’s
connection to an expressive work. Making other arguments than that just screws
up First Amendment doctrine for everyone.

The court of appeals does go on to say that there’s a deep
connection between the challenged statements and the First Amendment-protected
art they promote. Unlike the foregoing,
this is actually a legitimate argument. As long as there is a distinction
between speech that is sold and other things that are sold that happen to have
speech on them (e.g., cans of corn), this rationale will not destroy false
advertising law generally.

The court of appeals notes that “[t]he identity of a singer,
composer, or artist can be an important component of understanding the art
itself. No one could reasonably dispute that knowing whether a piece of music
was composed by Johann Sebastian Bach or a picture was painted by Leonardo Da
Vinci informs the historical understanding of the work.” I think that’s true,
but it’s interesting to consider the ideological work being done here: “Thus,
the marketing statements at issue here are unlike the purely factual product or
service descriptions constituting commercial speech in cases that Serova cites.”
There’s nothing “thus” about it! There
is a ground truth about who was the lead vocalist on these songs, at least as
much as there is about a “representation that products were manufactured in the
United States” and about an “attorney’s certification as an expert,” two of the
cited cases. Indeed, what counts as “made
in the USA” once you know the historical facts is often substantially more
subject to debate than how to decide who’s the lead singer on a song once you
know the historical facts, as far as I can tell. The implications to the consumer of the
“purely factual” question of who sang a song may be complex—but then again, so are
the effects on the consumer of “made in the USA,” and of knowing how much alcohol
is in a can of beer. And there are a lot of factual statements that are, because
of how science works, provisional: right now, we think some things about aspirin
are true because that’s what the scientific consensus is; false
advertising law should rely on scientific consensus even though the ground
truths it seeks are subject to revision.

Anyway, the court continued, some statements about art could
be commercial speech—like film ads featuring fictional endorsements from a
nonexistent critic, or a statement falsely stating that a particular song is
included in an album. But not these statements, where (1) the identity of the
artist was itself an issue of public discussion and interest; and (2) Sony had
no personal knowledge of the issue.

Final note: this standard is out of whack with the usual
First Amendment rules for defamation, which are usually thought of as pretty
strong. Defamation of a public figure requires malice—knowledge or reckless
disregard for a high probability of falsity. Even if the court of appeals was
right that Sony’s scienter should matter, why shouldn’t it be enough to allege
that Sony was reckless about the truth? Suppose, for example, that a non-Sony defendant had privately acknowledged to Sony that MJ probably wasn’t the singer.

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YouTube’s terms of service/content policies aren’t commercial advertising or promotion

Posted on March 2, 2020 by rtushnet

Prager Univ. v. Google LLC, No. 18-15712 (9th Cir. Feb. 26,
2020)

YouTube isn’t a public forum and didn’t engage in false
advertising by telling users it supported freedom of expression. Prager “University”
(it’s not) complained that YT was discriminating against its conservative
viewpoints by putting some PragerU content in Restricted Mode, which makes it
unavailable to 1.5-2% of users. YT’s guidelines say that videos that contain
potentially mature content—such as videos about “[d]rugs and alcohol,”
“[s]exual situations,” “[v]iolence,” and other “[m]ature subjects”— may become unavailable
in Restricted Mode. The restriction is done either by an automated algorithm
that examines certain signals like “the video’s metadata, title, and the
language used in the video,” or manually by a user; there is an appeals process
that involves human review. YT tagged several dozen of PragerU’s videos for Restricted
Mode and demonetized some videos. PragerU
appealed but was not entirely successful.

The ubiquity of YT didn’t make it public. Marsh v.
Alabama is about a company town where the private actor “perform[s] the
full spectrum of municipal powers,” which YT is not. And even if YT has said
that it’s committed to freedom of expression and an Alphabet executive stated before
a congressional committee that she considers YT a “neutral public for[um],”
private companies can’t self-designate as public fora. The First Amendment is
not opt-in.

The Lanham Act false advertising claim also failed. YT’s
statements about its content moderation policies weren’t “commercial
advertising or promotion.” Its
statements “were made to explain a user tool, not for a promotional purpose to ‘penetrate
the relevant market’ of the viewing public. Not all commercial speech is promotional.” Likewise,
the designation of PragerU videos for Restricted Mode wasn’t advertising or
promotion, and it also wasn’t a representation. The designation, and the reason
therefor, are not made available to the public. And the fact that some PragerU
videos were tagged to be unavailable in Restricted Mode didn’t imply any
specific representation. Even implied falsity must be specific and communicated
to a substantial number of consumers.

Likewise, YT’s “braggadocio about its commitment to free
speech” was puffery/opinion, not an actionable factual representation. Statements
that YT believes that “people should be able to speak freely, share opinions,
foster open dialogue, and that creative freedom leads to new voices, formats
and possibilities” and statements that the platform will “help [one] grow,”
“discover what works best,” and “giv[e] [one] tools, insights and best
practices” for using YouTube’s products were unquantifiable puffery.

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Trademark Scholars Roundtable, Stanford part 3

Posted on March 2, 2020 by rtushnet

Session 3: Remedies in Trademark and Unfair Competition
Cases

Introduction: Mark Lemley, Leah Chan Grinvald Discussant: Laura
Heymann, Eric Goldman

[I had another conference in the morning so came in late.]
Discussion of eBay’s effects. Burrell: In other countries the trend has to been
add more and more remedies, extension of jurisdiction over intermediaries, etc.—US
trend is not recognizable elsewhere.

McKenna: Lack of unfair competition has limited our
flexibility w/r/t remedies; injunctive relief could be limited to font,
presentation, other concerns.

Lemley: Increased use of counterfeiting claims may also be
response to limit on remedies: a way to get out of eBay (maybe) and to get out
of limits on damages/disgorgement. Disgorgement
other than replacing damages is a windfall to P: it’s money it wouldn’t have
earned (b/c you can’t have double recovery) unless it is in practice just
recovery for unprovable actual damages. Disgorgement as deterrence: if not
limited to willful infringers, will deter some amount of lawful conduct.

Heymann: may also be for damage to reputation that we don’t
think we can measure. [Though there’s no reason to think this actually happens
in terms of reputational harm.]

Burrell: there are people who say that giving up wrongfully
acquired profits isn’t punishment, so willfulness shouldn’t be required.

Lemley: it’s a differently calculated form of punishment.
Treble damages might be more punitive, though they also may be less punitive than
the gains from unlawful conduct, as in antitrust/drug cases.

RT: Irreparable injury: I see it these days often used as
quick way out of a PI analysis when the underlying claim is weak. Analogy to
230: does it matter what the rationale if the P was going to lose anyway? I think a
reasonable answer is yes, but how it matters is up for debate. Making a bad
case cheaper to fight actually has some value where otherwise costs will deter
assertion of valid defenses. Cf. Lunney, etc.

Goldman: Equitable remedies: all facts are in play; Ps may
not immediately and easily be able to gauge whether they will be able to establish
all the requirements for injunctive relief, which makes it different and worse
as a sorting tool than 230.

Mid-Point Discussants: Bill McGeveran: Notable that
intermediaries will stand up for users in some circumstances, e.g., Fourth
Amendment issues/tell police to get a warrant. [Though it’s less risky in that they
don’t face severe financial penalties as long as they merely seek confirmation from
a court about that, and they also may think that law enforcement demands/burdens
on the platforms can be made more predictable this way.] Privacy by design as a
potential model for TM remedies, remedial modesty. Easier online to find the
people who need corrective advertising than if the ad had been a billboard. UX
can be targeted. Also greater ability to monitor compliance, which could give
courts more ease in ordering targeted remedies.

Jessica Silbey: remedies as ends of stories. They can tell
us the moral of the story or what the story was about. Confusion in remedies
signals confusion in what we’re trying to do w/TM law. Injunctions tend to
broaden TM rights when they are broad. But no injunction at all seems like a
gutting of the benefit. So how to inform courts/ think more specifically and concretely
on choices w/in the scope of the injunction? Help them think about what they
mean by goodwill. Money and control are the options: why is money not good
enough/why do we go to control? Particularly relevant to TM. In patent/© money
matters a lot; is it b/c there’s a consumer interest where the consumer doesn’t
benefit if $ changes hands? If it’s about control, that’s a different way of
thinking about the moral. Compulsory licensing remedy? Why is that uncomfortable
for TM? What would a reasonable royalty be? Would a licensing remedy be likely
to broaden the scope of TM rights in ways we don’t like, as w/the arguments
over fair use? Role of attorneys’ fees.
In © cases, there are a lot of settlements that look like reasonable royalties
+ fees, b/c lawyers assume that fee shifting will happen if they get past sj.
Need more empirical work on remedies to inform courts/policies.

In teaching, we could frontload remedies/teach them as front
and center to help students understand their practical importance. We could
help out w/amicus work only on remedies: think about the stakeholders who aren’t
represented.

Dinwoodie: Old Kellogg litigation ended up being very much
about remedies: there were multiple cases about what had to be on the box, what
shape the biscuit could be and still absorb milk, and so on. Satellite
litigation is a real thing when we talk about the burden of monitoring.

McKenna: compulsory licensing isn’t that different; look at
how little we actually require for quality control in a licensing relationship.
A lot of stuff that’s licensed, there isn’t any quality to control: these aren’t
products/services w/any expertise in the licensor co. The value the licensee is
getting is the value of exclusivity. It’s not about quality control, which
could be baked into a compulsory license. It’s about the value of exclusivity.

Gangjee: Coexistence agreements as self-help remedies. Ends
up working along similar lines, but may fool the public even though we allow
it.

Heymann: property concepts: the affront of unauthorized use
demands something of the remedy. Not just control of property but control of
reputation/identity, at least for some TM owners.

Lemley: in real TM cases, cases going to what TM is supposed
to be about, reputational interest and consumer interest align and should be
protected by injunction. Not w/confusion w/o materiality. Rather not have those
latter cases at all, but $ is less disruptive than control, so a halfway step
would be to refuse injunction. Should we limit the alienability of those injunctions,
then? Settling by allowing D into the market in exchange for $ suggests that it’s
not really about control/reputation but really just about $.

RT: false advertising remedies are not always but sometimes
tailored to figure out what the defendant actually can say. The solution space
seems wider to courts as does the defendant’s interest in speaking truthfully. Look
at those analogies.

Silbey: trade secret cases can require losing party to pay
ongoing monitoring fees; maybe there’s a workable parallel there. Can imagine
compulsory licenses as a reasonable thing if we’re worried about
anticompetitive market exclusivity, but they could end up just extending the TM
owner’s footprint. Tying losses to infringement: we estimate damages all the
time. Why worry more about causation in TM than in other cases? Estimable v.
irreparable seems like another axis worth thinking about, as does discrete v.
ongoing behavior. Remedies should be as specific as possible.

Burrell: TRIPS prohibits compulsory licensing of TMs, though
of course the US may no longer care.

Fromer: Gucci allowed Gucci Ghost to infringe: makes Gucci
more cool by allowing it (though not allowing certain others). Uncontrolled use
can sometimes be good for brand owners.

Diamond: Monitoring isn’t realistic in many cases. Go to Blinded
Veterans website: there’s no disclosure. Is it b/c they just gave up b/c disclaimer
wasn’t enough? Or is it that they’re now ok with the market and there’s no
confusion/overlap problem?

Silbey: TM owners build monitoring into their own practices;
the question is whether there are creative ways of shifting costs. TM owners
get a lot of feedback from clients about possible infringements—monitoring is a
partnership b/t audiences and owners. In some cases, Ds had to submit ongoing
evidence of uses and how they change over time. So a T-shirt maker might have
to submit new designs for approval. But she only found that in merchandising
cases. Costs of monitoring might be different across types of cases.

Diamond: Across cases, the Q is whether people think it’s
worth doing.

Silbey: there’s an expressive component to a judge saying it
should be done. Trade secret monitoring doesn’t seem to be much enforced but
hangs over employees’ heads.

McKenna: monitoring is a normal part of complete injunction,
which says don’t use mark X or anything too similar. What is too similar is an
ongoing Q. So court needs to pay attention to how it’s writing the injunction.
There’s a difference b/t requiring “reasonable prominence” and requiring this
font/this size. Happens all the time with settlements too. It’s a marginal
additional cost.

Silbey: we could add clarity/predictability.

Gangjee: also happens with parallel imports/repackaging
& rebranding required: you have to submit samples. So it’s already built
into the system.

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Trademark Scholars Roundtable, Stanford part 2

Posted on March 2, 2020 by rtushnet

Session 2: A Forward-Looking Perspective

To what extent should trademark or unfair competition law
reflect consumer expectations or seek to shape or set them?

Introduction: Rebecca Tushnet

One consideration in how we should structure the regime is
that casual empiricism is a pervasive and possibly unsolvable problem because
courts don’t notice when they’re making empirical claims: SCt cases (even in
Tam, on registration as endorsement). Necessary for PTO given volume: TMEP
assumptions about functioning as a mark. Heymann: it is indisputably true, as
Graeme Dinwoodie has noted (What Linguistics Can Do for Trademark Law), that
trademark law must of necessity take certain shortcuts to ensure that
litigation does not devolve into a morass of evidentiary issues; true, too,
that in a field (law) that depends on precedent for efficient private ordering,
there must be certain general rules that can be derived and followed.

So at the outset we should just work on clarifying our
understanding of to what extent empirical claims are truly our best guesses
about a wide range of consumers and to what extent they are normative claims
about how reasonable consumers should act. Cost benefit analysis &
consideration of error costs have a role to play in our legal tests: what if
we’re wrong about the empirics, how easily can consumers/competition recover
from our error? See this in Qualitex and
a bit in Wal-Mart—if we’re wrong about distinctiveness, producers will usually
have discrete symbols they can use instead to identify source. Potential justification for “limping marks”
concept as well.

One thing we don’t know yet in law is how consumers learn in
response to broad market changes—while a flood of counterfeits seems likely to
change consumers’ reliance on branding alone, what pathways are amenable to
change and what will remain persistently confused? Much research suggests that demographic
characteristics are far more important to consumers’ orientation towards belief
than any particular thing they see in the market. [Possiblity of consumer intuitions
about right and wrong/free riding, as with promotional goods, encouraging
beliefs about the factual state of the world? Motivated cognition—though the
research suggests that many more consumers think copying is unfair than think
that the trademark owner definitely produced promotional goods.]

But: What messes us up is not what we don’t know, it’s the
stuff that we know that just ain’t so: consider dilution and Sprigman et al.’s
work about how it’s the surprise that causes people to hesitate—there’s no
connection w/ a particular brand, so the response that we see when people
confront supposedly diluting marks is not the brand-specific mechanism that we
thought that it was.

Many claims made in the reading were (perhaps
unsurprisingly) persuasive to me, but striking how little empirical basis there
is for so many of them: For example, The Constructive Role of Confusion in
Trademark, Alfred C. Yen, makes a great point: our theory of secondary meaning
requires consumer learning over time: initial impression is supposedly
descriptive, later learning is that the mark source-indicating. The consumer is
not necessarily mistaken either time, but responding to market. If that’s what
really happens, which we have some reason to doubt! We all cite the Lee et al study on
identifying terms as trademarks by their placement on the package, but what
about replicability? That study tells us something that seems intuitively
powerful, but how far does it extend? Can it tell us anything about images,
fonts, slogans? In the state of
empirical uncertainty, do we have any choice but to use our own intuitions as
the model of reasonable consumers’ reactions?

Here’s a hypothesis: Maybe our big doctrines seek to shape
producer behavior and only indirectly affect consumer expectations, and maybe
that is exactly where we should focus. Examples. (1) Genericity/functionality: we
tell producers that they need to develop a signifier that is nonfunctional and
not the only thing to call they product. (2) Abercrombie: producers should choose
an inherently distinctive term for greater certainty. (3) Free speech limits:
don’t bother to try to control certain kinds of speech/convince consumers that
your authorization is required because we won’t enforce that. That might be an approach we could be more
confident would actually work than trying to shape consumer expectations
because producers are somewhat more likely to change behavior in direct
response to legal rules.

Consider the story of keyword
advertising: judicial opinion started out w/skepticism and then rapidly came
around to endorsement as its utility became more apparent. But how did
consumers learn that keyword advertising didn’t always produce only
searched-for trademarks? The studies show that they mostly expect that now, but
did they always? Was the legal doctrine just the reactions of educated judges
and their clerks to the increasingly apparent benefits? [Cf. Heymann on
less-educated consumers and the difficulty of judges entering into their
perspectives.] It was producers who
pushed back and kept using the tactic because it made so much economic sense,
and they were not turned into pirates and counterfeiters; instead they largely
won the day.

Consider also the
example of private label goods imitating house brands. Several early cases found
infringement by house brands that imitated national brands; Yen’s article says
that opinions now “generally” state that consumers are not confused because
they have learned from prior experience to distinguish private-label goods from
their name-brand referents, and I think he reflects the consensus position on
this. Which is notable, because, in fact, there are only two significant cases blessing
the practice, and one of those cases found infringement by one of the house
brands. Yen says consumers learned; Dinwoodie says the same: “consumers in the
United States have clearly become accustomed to private label practices in
supermarkets. Beside every branded product, there is a store brand lookalike, labeled
with the house brand. As a result, following evolving social understandings
about marks in such settings, courts have cut back on the ability of large
brand owners to prevent the sale of competing store-branded look-alikes.” But
was it truly “as a result”?

Why did sellers
persist in this technique given the early losses (not to mention the fact that
you can’t do it in many other countries)? Talked to May Department Stores’
lawyer. In general: Copy testing was not
part of the process for approving the labeling of a house brand. Stores took the risk despite initial
unfavorable precedents, similar to search engine advertising, presumably
because it was likely to prove very profitable if successful, and also because
they believed they could successfully distinguish the products from the national
brands in consumers’ minds. (Also, some sources suggest, because they believed
that most retailers would be too nervous about disrupting relationships to
challenge the practice.) Courts eventually accepted that they were right—though
notably without too much empirical evidence; note casual empiricism also on
display in Conopco and Food Lion cases.

If stores successfully
bet on courts’ acceptance of consumers’ ability to distinguish, suggests more consumer
perception invariance than we might have assumed—at least w/r/t things
consumers already care about. Compare to the TM forfeiture cases allowing universities
to reclaim control despite hundreds of years of nonenforcement: consumers can stay
stubborn in making associations (or not making them, in the case of house
brands), regardless of whether we think they are confused about
something relevant.

Possible responses:
(1) commit to real engagement w/ marketing literature; (2) commit to telling
producers what we want them to do; (3) commit to normative vision of
consumer glancingly informed by empirical intuitions; (4) overarchingly, talk
explicitly about which of those paths is important and when. Normative vision
may be particularly important for competition/free speech concerns. But it’s also worth asking claimants like the
CYOA plaintiff and the Honey Badger plaintiff to prove up their claims with
real empirical evidence rather than relying on proxies, given that there is no
history of clear consumer reliance on content of speech to make decisions about
whether trademark owners sponsored that speech. I really don’t like the
false/misleading distinction in advertising law but there is a point to
requiring surveys sometimes as a way of managing courts’ epistemological
hubris.

Jeanne Fromer: Relying
on empirical evidence requires answering prior empirical questions: what we
want to ask for as evidence of “confusion.” Which answers matter? TM as encouraging
businesses to follow certain rules makes sense but we have to be clear about
the normative goals so our empirics match up to them.

Two different roles:
Empirical evidence can help us establish standards and rules and then there are
the further empirics we would want in individual cases. Surveys, testimony,
observing online behavior are all different sources of empirical evidence:
searches originating on Amazon v. searches originating on Google.

How do we get there?
Consumer construct. What kinds of confused consumer count? Hasn’t been empirically
grounded at all.

Distinctiveness: how
grounded in consumer perception do we want to be? Should we require secondary
meaning before protecting anything at all? Any well resourced business will be
able to generate secondary meaning, while new entrants will find it harder. That
perspective’s not anti-empirical but it’s differently empirical: TM law
should encourage entrants to choose specific types of marks; we could do a
better job of encouraging choice of truly inherently distinctive marks.

Law might become
less stable and more fact intensive if we did all this given that marketplaces
are dynamic. Changing meaning of words. Consumer
behavior changes over time. Do platforms change the roles of TMs? NYT story on unpronounceable marks on Amazon.
One story: everything else is taken; another: trademark semantic content is no
longer as important. Fromer thinks one reason is to take advantage of lack of
memory: the seller can easily disappear from Amazon and loses nothing by doing
so/switching names. Empirics will make law less stable as we have to reevaluate
what consumers are doing.

Discussant: Jake Linford: how to measure consumer
expectations? One possibility: corpora. Harder to game than 3d party surveys? Could
we measure fame by looking for a certain amount of use/a certain frequency? You’d
have to hire real empiricists to do it right, not just ask the court to do it
itself. Constitutional interpretation folks are trying to convince judges to
run with it on their own. No strong commitment to whether this is a good idea
or not. Online surveys are getting cheaper; ATurk surveys are at this point no
worse than other surveys; survey as a costly screen may not stay true for a
while.

Robert Burrell: Consider In ‘n Out Burger: they sell an Animal
Style burger. Defendant in Australia started Down ‘n Out Burger w/ a red and
yellow arrow pointing down. Marketing played off of In ‘n Out: “Also sell
animal style for those of you who want a heart attack on a plate.” Pretty clear
that there was no likely confusion; P scoured the internet for evidence of
confusion and the most it could find was 7 posts, one ambiguous; another one said
“these are pretty close to In ‘n Out” which was strong evidence of no
confusion; in 2019 the most recent was 2016. Nevertheless the court found infringement.
Why? Court rolled out the idea that confusion can arise when consumers assume a
licensing arrangement. Second, court said no high number was required; a few was
sufficient. Third, burgers are cheap and people pay little attention. Fourth,
imperfect recollection means consumers may misremember the mark. Finally: we
must remember that we’re dealing with a registered trademark. The fact that circumstances
might mitigate against confusion didn’t matter. Seems that if we want to do
better than that, there are a number of things we need to do.

First, the rules that have emerged about how you compare
marks for similarity: although it’s supposedly factual, there are rules, e.g.,
pay attention to the start of words; mechanistic applications should be
unpacked. Have to accept that w/in the context of registration, reining TM in
will require embracing double identity, accepting the core property style
protection where we don’t pretend it’s about confusion. Also, talking about
confusion instead of talking about harm is a problem: In ‘n Out has no prospect
of opening in Australia any time soon. Registered since 1990s, but only one pop
up per year; sold 938 burgers in 7 years. If we had a real nonuse doctrine, this would
have been cancelled. Can’t talk about these issues in isolation. Lost context
of consumer response: why are we keeping marks on the register?

McKenna: what default do we have in the absence of empirical
evidence? Law is full of assumptions from circumstantial evidence/proxies.
Whose burden is it to displace the things baked into the law? More generally,
what counts as empirical evidence? Courts rely on proxies for all kinds of elements
of a TM case: secondary meaning; likely confusion. Mechanisms about which parts
of marks to focus on may or may not be empirical. So we could ask whether these
proxies do approximate empirical judgments. The proxies for secondary meaning
are really weak. Also possible that these are not proxies, but actually just
decisionmaking guides not attempting to get at empirical reality, in part b/c
of the instability that would be introduced into the law if it really did
respond to consumer behavior. Could we do better at the wholesale level to make
these proxies correspond to what they say they represent, or should we be
explicit about our desire not to do that? Abercrombie: for
arbitrary/suggestive, we could just say we’re not making assumptions about
source designation but rather about competitive need.

Dinwoodie: Notable that there are few reported decisions
about trade dress, but how do we prove what actually happened in the market?
Not a slew of decisions but nonenforcement in the wake of Conopco. Enforcers,
juries, private ordering mediate between consumers and their understanding. Maybe
rules about the penalties for bringing/not bringing lawsuits may have to be
rejiggered to give them the right incentives.

Sheff: Fromer’s point about well resourced firms being able
to buy the proxies for secondary meaning: seems like this is by design.
Producers are content to undertake the costs of search as long as they got the
opportunity to persuade consumers. Has argued that producers take advantage of
cognitive bias. The law is designed to reflect those biases, even if not
rational. Trusts consumers to find what they want, in a nonrational way; give
producers an incentive to set up a market for works for those consumers.

Grynberg: what does it mean that there are weak marks on Amazon?
Possible offloading search to platforms. TM work is being done by “Amazon” but
the marks there are weak, suggesting that something is going on w/TM value. [He
says related to doctrine that allows Amazon to use TMs in search, but it may
not be since these seems designed to surface particular sellers when there’s a
search on generic terms.] Even if we were to declare the marks on Amazon not
marks for failure to function, that wouldn’t change how Amazon works. It’s no
longer a TM problem and now a consumer protection problem. Note that Amazon’s control takes some influence away from
TM owners but concentrates it in ways that may be a separate problem [and that’s
also true of complaints about house brands.]

Focusing on influencing sellers is not in tension with
having a normative ideal of the consumer—that normative conception is one way the
law has to tell sellers what to do.

Dogan: In ‘n Out is using confusion as a mask for fairness.
If we’re thinking about empirical support for features of TM analysis, this is
where we need empirical support for the countervailing values. Make salient the
effects of not respecting the competing values. Studies by medical researchers
showing that especially elderly people rely on color and shape to take medications:
that is valuable in not just talking about the values but demonstrating the value
to consumers of restricting TM rights in particular ways.

Burrell: Australia is willing to recognize that consumers
will more readily perceive differences when marks are stronger, so it was
important for In ‘n Out not to argue that it was a well known brand.

RT: just starting to work on house brands but interesting
that I haven’t yet found empirical work on copycat house brands as such until
after 1995. Before: brand names, other determinants of confusion. After:
increasing interest in the marketing literature. Can’t (currently) reject the
hypothesis that consumers were never confused; if that was true, there was not
really a learning period.

Litman: even after 1995 there were cases that were filed but
not litigated when the D changed the label.
Some casual empirical evidence that consumer perceptions changed; when
she used to show lookalike trade dress to students, they used to say “how is
that possible?” [though it may be relevant that unfairness is one reaction and
confusion is another] and now they say “that’s a house brand.” This was the
first year that they were unanimous that it wasn’t confusing. The trend over
30-40 years has been pretty steady.

Nonsense brands on Amazon are doing the same work as old
style house brand in pre 1995 US—no one remembered the house brand/paid
attention to it, it was just the brand that was in Safeway or Kroger or
whatever. They weren’t exactly TMs that failed to function, but they did
indicate “this is made by the company that makes stuff for this store.”

Lemley: market structure expectations is what we’re really
talking about. Should TM seek to preserve existing markets? Should we allow new
forms of competition enabled by actors like Amazon? Suppose the claim is: by having a “store” page
on Amazon, that creates the impression that it is authorized by the manufacturer.
Consumers may not have a well formed set of opinions about a new process that
hasn’t existed before, which might also be true of house brands. TM has to, in
that case, serve as a norm entrepreneur one way or another as it reacts to
these new forays. Doesn’t mean it can’t change in one direction or another, but
the trend he’s seen is to impermissibility.

Could mean that survey evidence is more useful when
consumers have experience w/something than when they don’t. Keyword cases:
consumers understood that this was a search result, but were deeply confused
about whether it’s an ad or not. [They’re still confused about that!] He thinks
consumers got better and better about IDing ads and Google responded by making
it harder to tell the difference. Broader point: more reliable evidence when we
have experience with a thing.

Silbey: picking winners in an uncertain situation: we can
talk about what the default rule should be.

McKenna: many of us have told the story that consumers
adapted to private label goods; another possibility is that consumers had no
expectations one way or another and they would have adapted to whatever the
rule turned out to be. Proxies: had we relied on ordinary proxies like
similarity of marks, we might have decided to bar the practice as confusing;
sometimes in new circumstances the proxies are especially bad and we should be
more suspicious of how well they track. [A
really good example of this is the constant use of the Twitter, FB, Instagram etc.
logos and fonts by various people. Traditional nominative fair use doctrine
would tell us that the logos/fonts convert the uses from fair to confusing, but
no one would be confused about whether Twitter endorsed your local hot dog
stand.]

Mid-Point Discussants: Bob Bone: Which side should you err
on if uncertain about empirics in a given case? Depends on whether you think
there are good alternatives with same benefits for D; maybe on whether there is
harm to P, which there often might not be.

Incentives are central to law. We design rules to affect ex
ante incentives in contracts, torts, etc. Why not in TM? Maybe they’re not an
effective target because of heterogeneity, changeability, etc. Is it easier to affect
producers? Maybe they’re more homogenous, stable, but that’s questionable too,
though relative to consumers that’s plausible. A moral framework would be a
different matter. But given that goodwill is itself dynamic and changeable, how
can/should a moral analysis take into account that goodwill might shrink in the
future anyway for other reasons?

Jessica Litman: fertile ground to nudge law is found in marketing
literature—we don’t need to do all the empirical research ourselves. Also, focusing on the harm is another way
into this question of what the wrong is, if there is any. Nature of incumbency:
upstarts lack clout, almost by definition. They can’t get Congress or INTA on
their side. Big successful upstarts can’t stand in for the new ones; we can’t
either b/c we can’t necessarily imagine who they are. It’s a limit on our
ability to advocate for flexible markets.

Secondary meaning: booking.com suggests difficulty with
empirical evidence. It’s possible for generic terms to have secondary meaning,
and if we’re committed to the policy justification for genericity then we
shouldn’t rely on that.

Lisa Ramsey: Trademark WatchDawgs has been doing letters of
protest. Sell T-shirts and similar goods; trying to get PTO to pay more attention
to failure to function/distinctiveness. First Amendment arguments may also be
available to shape TM laws. Need more work on validity stage, to get more marks
rejected. Amazon took down romance books
with “Cocky” in the title on the basis of a claim based on a registration that
was actually descriptive. More rigor is needed. Should be using common sense to
refuse to register.

Sheff: the market is deliberately set up to encourage
concentration—it saves consumers from having to think more by encouraging
consolidation. Means that not every purchase presents us with the paradox of
choice [though it’s not doing a great job on toothpaste]. Only when the
alternative serves a significant interest making significant resources available
to press back on the expansion of TM claims do we see resistance to rules that
increase bigness.

Linford: we don’t ordinarily change liability now at T1 b/c
we think the conduct will not be tortious at T2 (e.g. self driving cars may
eventually be good, but are they doing harm now?).

Gangjee: reminder that providing detailed information to
consumers is often just not possible: they can’t process too much. May need
competition authorities to intervene in such cases.

Fromer: defends role of academics in helping little guy.
Work w/Congress on TM registration—they tell us they’re interested in the
little guy. Can be effective way to get Congressional ear. And sometimes small
and large business interests align. Large businesses can be trying to enter the
market again and again and again: Target was concerned with fraudulent TM
filings; willing to bear the costs to fight it.

McKenna: Amazon’s TM procedures will displace a lot of TM
law even if we get the cases perfect, given how easy it is to register. Sheff’s
comment: not clear that the system decreases consumer info: we’re awash in
signifiers, differentiation, multiple brands, same producer making lots of
brands at multiple price points. We might be better off with classic competition.

Sheff: maybe represents some actual segmentation in the
market.

McKenna: possible but we all know often there aren’t actual
differences. Open Q whether this is any simpler than the alternative.

Silbey: opportunities to push back against Amazon program
versus pushback that happened against Content ID? Models to be found? Are we assuming a policy of equal
opportunity/do we want to say that incumbency bias is a problem? Is it bad that
having predictable winners and losers based on market share is a thing in TM?
If we think so, what would the responses be? E.g., embracing reverse confusion,
rejecting IIC, strengthening Tea Rose doctrine, value inherent distinctiveness
over secondary meaning, something else?

Grynberg: you don’t need all that much TM law to get an incumbency
bias. Ralph Brown was already complaining about incumbency bias when the scope
was much smaller. Secondary meaning alone did that. Not necessarily tied to
extensions of TM; exogenous forces did the work.

Goldman: TM law already ignores shaping of meaning by
intermediaries, e.g. grocery stores who decide where to stock things even if
they don’t have house brands. There are pronounced problems w/intermediaries
but it’s not just Amazon.

Fromer: EDNY case, 2 weeks ago: unregistered TM; sold goods
on Amazon. Chinese individual got a registration using a photo of one of P’s
goods & went to Amazon and got a takedown. TM trolling/extortion to the
next level. Eradicated P’s business. Sought injunction to get Amazon to
reinstate them; injunction granted even though Amazon isn’t a party. Law is not
willing to step back fully but motivated parties [not to mention court’s willingness
to ignore the terms of the contract w/Amazon!] will have to involve it. TM bar
has thought for too long that registrations impose no costs on others; clearer
than ever this isn’t true. Amazon is a good place to look for these arguments.

Lemley: To say that TM is a small part of incumbency is not
to say it’s not a part. TM law has a role in worsening the problem. The problem
is worse now than it was in Brown’s time: every market is more concentrated now
than through most of the 20th century: fewer and fewer winners across a wide
range of industries. This was not inevitable and Europe is going in the
opposite direction: US is now less competitive than Europe, reversing the
historic pattern. Blame on antitrust, but also on IP and other tort law wielded
against disruptive challengers to incumbents. Another potential step: intermediaries
as allies, advocates pushing back against expanding IP. The reason we still
have an internet, for as long as we still do, is that a couple of big tech
companies lined up ten million people to fight SOPA/PIPA and stop fragmentation
of internet. They are dangerous allies b/c their interests may not align; they
can be coopted; they are easier targets for legislation. But if you’re a small
print on demand company, one way to fight back against brand bullies is to
enlist Amazon. The risk is that they cut a deal and back away, but they’re at
least provisionally a complicating factor: a big guy with incentives notionally
aligned with selling more varied stuff. Also grocery stores!

McGeveran: Ratchet effect of rights accretion may give
courts pause: if we have reason to believe that consumers are guessing at what
the rule is rather than reporting their own perceptions, that could be reason
for courts to be consumer-shaping rather than reactive.

Heymann: could do that with surveys. Ask consumers “why do
you think that?”

McGeveran: though there are reasons to question that.
Heymann agrees: people don’t always know what their reasons are.

Silbey: TM law isn’t usually thought of as having an equal
opportunity to compete component, but maybe it should.

Diamond: what exactly is common sense?

Lemley: poor man’s survey: me and my friends. Patent law
flirted with ignoring common sense when you couldn’t find a written connection,
and it was a disaster. We do give the jury/factfinder a lot of discretion when
we use common sense as a standard, but there are different structural regimes
and it does let you weed out lousy claims on both sides w/o requiring a survey.

Dinwoodie: French rulings are almost purely common sense;
they don’t tell you much about their reasoning so they are hard to refute.

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Trademark Scholars Roundtable, Stanford

Posted on March 2, 2020 by rtushnet

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
manipulation

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
expectations

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
pressure

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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Amicus brief in Warhol v. Goldsmith

Posted on February 28, 2020 by rtushnet

Working with Chris Bavitz and the Cyberlaw Clinic, I drafted a law professors’ brief on the issue of substantial similarity as a ground for affirming the district court. Drawing on Jeanne Fromer’s presentation on memes and copyright:

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DOJ 230 workshop part 4

Posted on February 24, 2020 by rtushnet

DOJ Section 230 Roundtable, afternoon

Chatham House Rules

Session 1: Content Moderation, Free Speech, and Conduct
Beyond Speech

How do platforms deal w/defamation? Standard practice is to
review the complaint, the content; compare to TOS/code of conduct. Removal if warranted,
contact poster if warranted and sanction at some level if warranted. If no
violation, it can be difficult. Service provider can rarely determine falsity.

Hassel v. Bird is part of a trend of expanding 230 immunities
outside recognizable form. Involved a statement adjudged to be
false/defamatory. Court ordered platform to take it down; platform declined.
Platforms just say they don’t care.

Distributor liability would be consistent w/text of 230.
Zeran ignored 300 years of common law If
platform is made aware, there is a responsibility to do something.

That’s not what distributor liability was. There is not 300
years of distributor liability; 300 years ago people were still getting
arrested for lese-majeste. There is no
common law of internet liability. 230 did cut off common law development of
secondary liability but it is possible that the First Amendment requires
something very much like 230.

There are three levels in the Restatement: publisher,
distributor, and provider of mechanisms of speech, such as photocopier
manufacturer and telephone company. That third level is not liable at all.
There are cases on the latter. The Q is whether internet companies are
publishers, distributors, or providers of mechanisms of distribution. Consider the city: if someone is libeling me
on the sidewalk, I can’t sue the city. Tend to be people who are by law
prohibited from discriminating—broadcasters when they sell space to political
candidates. [Notably, not photocopier providers—at least I can’t imagine that
anyone thinks that their liability for defamation copied on their machines
turns on whether they only sell to politically correct copiers.] The real
innovation of 230 was not to abandon a 2 level structure, but it also said that
service providers get protection even though they do have the power to decide
what’s allowed. Maybe we should abandon this category, or reserve it for
service providers that don’t discriminate, but traditional rules also had
absolute liability, not just notice and takedown. [When communication is not
private one-to-one but one-to-many, nobody wants platforms to not discriminate
against bad content, because that makes them unusable. So the common carrier
neutrality requirement might not be a good fit, though of course that doesn’t
necessarily mean that immunity would be the constitutional rule in the absence of
230.]

The libelous/not libelous problem is very difficult. A lot
of libel judgments in the record are provably fraudulently obtained, not
counting the ones that are outright forgeries. Default judgments, stipulated
judgments—no reason to think they’re trustworthy. Deeper problem: I run a blog,
someone comments negatively on Scientology, which complains. If you impose
notice and takedown, I have to take it down b/c I’m in no position to judge.
Judgment in hand=much smaller set w/its own problems; w/ notice regime, there
will be default takedowns. Maybe that’s fine, but that’s the downside.

No one is arguing against freedom of speech, but there’s a
reality that some platforms with recommendation engines/algorithms have more
power than newspaper over what we will see, amplifying their content. So we
should figure out a category for a digital curator that classifies companies
that use behavioral data to curate and amplify content, and then the
responsibility is not just in allowing the content; did the algorithm amplify it. You’ll have to decide the thresholds, but
there is a missed conversation in acting like all platforms are the same.

230 cut off development of state law to see how we can
develop rules to fit a solution that is not analogous to a photocopier. These are
highly curated, controlled environments they are creating. 230 represents a
tradeoff, and they should give something back in public responsibility. That
was the deal in common carriage. In return, they got immunity from libelous
content.

230 clearly meant to reject notice & takedown b/c of
moderator’s dilemma. Most of these cases would fail; moderator can’t tell what
is true. Anti-SLAPP laws are also applicable. Defamation can’t be extrapolated to things
like CSAM, which is illegal under all circumstances.

If they’d fail on the merits, why have 230? It bolsters the
case b/c it shows the real risk of death by 10,000 duck bites. There may be
businesses w/o the wherewithal to deal with a number of frivolous lawsuits. 230
has been useful for getting companies out of litigation, not out of liability;
removing burdens from court system.

DMCA has notice and takedown. Not just sole discretion of
moderator, right?

It is often abused to take down obviously noninfringing
material. Even if the person responds, you can still have the content down for
2 weeks, and that’s very handy in a political system. People use the system for
non © purposes. 512(f) has been interpreted by the courts in ways that make it
extremely difficult to enforce.

Notice & takedown is good for © but overwhelming which
is why the content owners want staydown. © is always federal so there’s less of
a mismatch. DMCA isn’t about illegal content (CSAM), whereas © infringement is
illegal distribution, not illegal original content.

Where it gets tricky is often where the use involves fair
use b/c it can be difficult to build filters/automatic process to distinguish
lawful/unlawful, which matters for our discussion b/c much of the content isn’t
going to be easy to figure out.

Many, many studies and anecdotal accounts of bad takedown
notices. And the content companies are constantly complaining about the DMCA. The
best regime is the one you’re not operating under.

Notion that 230 didn’t contemplate curation is flatly wrong.
Libraries are curators; Stratton Oakmont was a curator. 230 was intended
to incentivize curation. Ultimately,
what is demoting vitriolic content online to make a community less toxic?
That’s curation.

There is a fourth Restatement model: 581 on distributors;
was almost made up by the Restatement reporters. There’s almost no case law
support for the distributor liability; Dobbs hornbook agrees that 1A would not
tolerate distributor liability. It is just not the case that there were a bunch
of distributor liability cases. But there is a property owner/chattel owner
provision of liability: if you own a bulletin board or something like that if
you’re given notice: that seems far closer than distributor liability, but the
legal authority for that is also extraordinarily weak. Even if as a matter of
principle there ought to be such liability, we don’t have 100 years of it. If
we did, it’s unlikely to survive NYT v. Sullivan. Cutting the other direction: to the degree
there is amplification, at common law, or republication, even if purely third
party content: extraordinarily strong precedent for liability for republication
regardless of whether you know or don’t know defamatory content. No particular
reason to think 1A would cut into the republication rule. Defamation cases that
go over the top [in imposing liability] involve republication. That’s just a
mistake by the courts.

A lot of harm at issue is not defamation. Illicit drugs.
What if $ goes through the payment systems they host? If they know about animal
torture rings, pedophilia groups, Satanic groups are hosting video—these are
not hypotheticals.

CDA was about pornography, not just defamation. Indecent
content is very difficult to regulate, b/c it is constitutionally protected for
adults to access. 230 means that many platforms block this constitutionally
protected speech b/c otherwise their platforms would be unusable. 230 allows
platforms to do what gov’t couldn’t.

Should platforms be encouraged to be politically neutral in
content moderation? Is it a danger we should be concerned about as more
political speech occurs in private forums?

Anecdotally, conservatives think that Silicon Valley is
biased against them. If you made it actionable, it would just hide better.
[Leftists say the same thing, BTW.]

Invites us to have a panel where 18 engineers talk about
what law professors should do better. We haven’t had any numbers here.
Discussions of how companies make decisions are completely detached from how
big companies make decisions. People care deeply, but all moderation is about
knobs. You can invest time & effort, but when you moderate more you make
more false positives and you moderate less you make more false negatives. Never
sat in any meeting where people said “we’re not legally liable so who
cares?” Political bias: rules v.
enforcement. The rules are generally public. Example: Twitter has a rule you
can’t misgender somebody. There is nothing hidden there. Then there’s bias in
enforcement; companies are very aware of the issue; it’s much larger outside of
the US b/c companies have to hire people with enough English & education to
work at a US tech company, and that tends to be a nonrandom subset of the
population. So that tends to be from
groups that may be biased against other subgroups in that country. There are
some tech/review attempted solutions to this but anecdotes aren’t how any of
this works. Millions and millions of decisions are being made at scale. There’s
a valid transparency argument here.

It’s a false flag to say that conservatives feel this way so
it’s true. Did we take down more ads on one side than the other? We don’t know
which side violated policies more, so that counting won’t work. Need criteria
for what is an ad/what is abusive, and we lack such criteria. This political
conversation takes away from the debate we should be having. [Also: If you are sufficiently transparent to
show what’s going on in detail that might satisfy critics, then you get a lot
of complaints about how you’re sharing bad content, as Lumen has been accused
of doing, and you may also provide a roadmap for bad actors.]

Transparency principles: disclose the numbers; explain to
users what the rules are and which one they violated; provide an opportunity
for appeal. Many companies didn’t have appeal options. We’ve seen improvements
on that.

Everthing is biased, but transparency can increase
understanding and trust. Build up to a fullblown standards process where all
stakeholders can be in the room, big and small companies, different users. Not
all use cases are the same. Also, AI is not one tech but a variety of enabling
tech. Its complexity is one of the things that standard developers are
grappling with. Starting with bias, risk, predictability, governance.

It’s a fact that Google held a meeting w/sr executives after
the 2016 election saying it was bad, and conservative engineers were fired for
their views. They should have a transparency report about this.

Of course there’s bias. The policies are deliberately
complex. Not just Google. Executives admit they hire liberal staff. [There is
deep confusion here between the moderators and the executives.] Twitter is the
worst actor. Despite all that, companies should solve the problem themselves.
These hate speech policies are garbage. EU hate speech policy would be much
worse. We have a 1A here that Europe doesn’t believe in. You could ban the Bible
under FB’s code, and Bible-related posts have been removed. Tens of millions of
Americans are sure there’s a problem.

The problem is at scale: every single group in the world
thinks they’re the one that’s targeted. Gay people, Bernie bros, conservatives.
The problem is a massive amount of innumeracy and non quantitative thinking in
this debate. 1000s of examples of bad
decisions exist even if you’re at nine-nines accuracy. Not a single one of
Google’s employees who was marching about the travel ban makes a single content
moderation decision or oversees anyone who makes a content moderation decision.
It is obvious that everyone in the world will not agree what speech moderation
should be, and they will all think they’re the victims.

There are plenty o’ conservatives at Facebook.

Should there be any affirmative obligation on transparency
in 230? New problems appear that you didn’t anticipate: people with white
supremacist usernames. You could say
that adding a new rule is inconsistent/not transparent, but when you didn’t
have the problem previously you have to develop some response.

Common law development is the norm w/in platforms. As FB
scaled, they went from one page of instructions “if you make you feel bad, take
it down” to rules that could be administered based on content. People didn’t
want to see hate speech. This wasn’t conservative bias, but civil society
groups & sometimes informed by European rules. There was no reptilian brain behind it all.

To claim that things didn’t change after 2016 is a fantasy:
big tech responded b/c Donald Trump won an election based on big tech.

No, that’s when you started to care about it.

Transparency: what is it really? Google’s numbers don’t
really tell you how the system works, they just provide numbers of requests.
Need to talk about granularity as well as scale. GDPR is another consideration.
Europeans won’t allow disclosure of personally identifiable information. That
means some gov’t here will have to extract that data as part of transparency.

Speaking of bias, consider the possible bias of gov’t in
determining whether the platforms are biased. You can’t tell a bookstore which
books to stock, and you can’t go to the NYT or Fox and require them to disclose
their editorial policies in the name of appropriate transparency. Assumption
that this is a matter for gov’t regulation instead of letting the market decide
is a mistake, at least in the US where the 1A constrains.

Misgendering activist was kicked off Twitter for tweets she
made before the anti-misgendering policy, and that’s the core of her legal
claim. 230(c)(2)(A) doesn’t say “hate speech” [though it does say “otherwise
objectionable” and it also says “harassing”]. You can’t have it both ways in
not being responsible for 3d party speech and not being responsible for your
own moderation decisions.

Other courts have said that spam is covered; other courts
have wanted something more like what’s listed in (c)(2). This isn’t a 230 issue
at all: the courts are recognizing that platforms themselves have 1A rights and
that they cannot violate 1A rights as they are not gov’t actors. Nothing to do
w/230.

As for mandatory transparency, many companies do have law
enforcement transparency reports and are expanding their efforts. Reporting
numbers may be a pretty dry read, but if you dig into the help pages of any
number of sites, you can get a better idea of what the rules actually mean.
Here is where small businesses would need a carveout; when you’ve built computer
systems to do one thing, it can be very hard to convert it into another (the
data you’d need for a transparency report). There’s been a transition period
for companies to revamp their systems in a way that’s useful for transparency
reporting.

Is the court overreading 230 and treating it as anti SLAPP
statute/MTD stage? It is an affirmative
defense, and the Q is whether the elements are present on the face of the
pleading? Usually there isn’t much question of whether a platform is an ISP,
whether the content originated w/a third party, etc. Discovery, where it
occurred, has focused on whether there was third party content, and that’s
correctly limited discovery.

1A right to discriminate in policy and enforcement?
Platforms, when acting in recommendation capacity like Google search/FB
stories, get to decide what to include and what not to include. Doesn’t
completely answer what happens solely in platform capacity: YT in what it
chooses to host. One way of thinking about it: first scenario is clearly Miami
Herald v. Tornillo; for the second, there’s a plausible argument that content
or viewpoint neutrality rules could be imposed under Pruneyard/FCC v. Turner on
what they host. The traditional model did say essentially that common carriers
got total immunity, while distributors with power to choose got notice and
takedown. There’s room for argument that 1A immunity requires even-handedness.
Not positive it’s constitutional, but not positive it’s not either.

Evenhandedness is impossible to define. What violates the
policy is the key. Let’s talk about real
victims who were connected to abuse via platforms. Conversation about political
bias is a sideshow that undermines search for help for victims.

Session 2: Addressing Illicit Activity and Incentivizing
Good Samaritans Online

Hypo: user posts a pornographic photo of a young woman.
Individual claiming it’s her asserts it was posted w/out her consent. Platform
doesn’t respond for four weeks. Alleged subject sues for damages she suffered
as a result of the photo. Suppose: Anonymous user posts it; alleged subject
claims it was posted when she was 13.

Argument that 230 still doesn’t cover it: there’s an
exception for crimes, including CSAM. If you look at the provisions that are
covered, they include 2255 & 2252(a), both of which have civil liability.

Argument that 230 does cover it: Doe v. Bates: this case has
already been litigated. The statute is
very clear about being about “criminal” law, not about civil penalties that
might be part of it.

Should 230 immunize this content against civil
claims? The platforms are horrified by the material, didn’t know it was there, and
took action when they knew. If you have a rule that you’ll be liable in these
circumstances, you’ll have platforms stick their heads in the sand. Given
potential criminal exposure, this is not a real life hypothetical.

What’s the current incentive to address this? Criminal
responsibility; notification obligation. And being human beings/adults in the
rooms. Criminal incentive is very strong.
Even with FOSTA/SESTA wasn’t about creating federal law; they took down
Backpage w/o it, it was about creating state AG authority/allowing survivors to
sue.

What would FB do in this situation? FB unencrypted: Every
photo is scanned against photoDNA. Assume it’s not known. All public photos are
run by ML that looks for nudity. If classified as such, looks for CSAM. Would
be queued for special content review; trained reviewer would classify it by
what’s happening and what age the person is.
Depending on classification, if there was a new high level
classification they would look for more content from the same user, directly
call FBI/law enforcement.

14 year olds sending their own nude selfies violate child
porn laws.

Sextortion victims are big population of CSAM material.
They’re being thought of as less egregious b/c it’s not hands on abuse but
suicide risk is almost doubled. In terms of 14 year olds breaking the law, feds
wouldn’t look at charging them for that.

But: State law enforcement has charged 14 year olds,
which is relevant to whether we ought to have more state lawsuits against
people that the states blame for bad conduct.

FB doesn’t allow public nude photos. If not marked as child,
would just be deleted. If reported to FB as nonconsensual, deleted and FB would
keep the hash to make sure it doesn’t reappear with a better algorithm than
PhotoDNA. If the victim knew the ex had
the photo, she can submit it to FB and that goes to a content moderator that
can prevent it from being uploaded. That’s a controversial project: “FB wants
your nudes.”

Regardless of company size, we care greatly about CSAM and
NCII (nonconsensual intimate images). Everyone views responding to complaints
as the baseline. Companies take idea of being in violation of criminal law very
seriously. Penalties for failing to report went up significantly in 2008; criminal
piece of this is so important: any state law consistent w/this section (CSAM)
could be enforced.

FB is the company that does the best at finding the worst,
but that’s very unusual. A child couldn’t anticipate that with every platform.
No prosecutions on failure to report. The fine is $150,000 which isn’t
significant for a tech company.

Not every tech company is funded like WeWork was. In fact almost no tech companies are and the
ones that are, are definitely taking action. People who aren’t deterred by
$150,000 and criminal liability are rare, and where you could deter them more
is by enforcement not by increasing the penalty.

Suppose someone sues the platform for damages as a result of
availability: should provisions be sensitive for different kinds of harm? If
someone is threatened and then raped or murdered, that’s different than having
personal information exposed. We might want to focus liability on the type of
harm proved to have flowed from this.

Identity of the user Q: if there were a criminal
prosecution, then the company would have to turn over the information, and also
if there were a civil prosecution you can get discovery. Dendrite/similar
standards can be used to override anonymity & get the info.

Platforms send responses to preservation letters telling sender
they have no obligation to preserve evidence for anybody outside of law enforcement.
They fight the subpoenas even though offenders are usually judgment proof. Costs
$250,000 to fight subpoenas. FB automatically deletes stuff after a few months.

Platforms ought to perform an evaluation of the
validity of the subpoena.

Euro data law has made platforms turn over data on 30/60 day
windows, that’s global.

Deleting content is very serious; many platforms immediately
delete the material reported to them. Helps criminals cover their own tracks.
There needs to be some type of regulation that when toxic content is reported
there’s some curative time you have to save it but not leave it up.

Reporting to NCMEC is a precedent for that. Should be used for war crimes, not just
domestic.

The process of giving us hypotheticals in isolation is a
problem. Each example ignores the problem of scale: you get a bunch of these
each day. And there are problems of error and abuse. E.g., French authorities notified the
Internet Archive that they were hosting terrorist content and had 2 hours to
take it down.

Hypo: terrorist uses online platform to recruit. Algorithm
recommends the group to new individuals, who join in planning acts of terror.
Platform gets paid for ads. Survivors of individuals killed in terror act sue
under Anti-Terrorism Act.

Should look at how banks are regulated for terror and crime
content. Money laundering. Financial services industry argued that they were
just P2P platforms that couldn’t be regulated for storing money for illicit
actors, but the US government imposed regulations and now they have to monitor
their own platforms for money laundering. Terror/organized crime aren’t
supposed to use banking services. You agree that your activity will be
monitored, and if bank suspects you’re engaged in illicit activity, a suspicious
activity report will be filed. That’s not working particularly efficiently. How
can we look at systems like NCMEC or other reporting mechanisms to improve upon
them? [This seems like a basic problem that money is not obviously and always illicit,
like CSAM. We’ve just been hearing about NCMEC’s challenges so it seems weird
to look at it for a model—the system that’s best is always the system you’re
not using!] Many companies that produce
chemicals and electronics have to control their supply chains to avoid
diversion by drug cartels or go to IEDs. Why does the tech industry get freedom
from liability for the harms their products cause? There are 86 designated
terror groups and we find activity on major social media platforms. Not fans
but Hezbollah has an official website and an official FB and Twitter feed. They
do fundraising and recruit.

Interagency colleagues are thoughtful about this—NSC and
other alphabet agencies. They have ideas about financial services, money
laundering, and that would be a productive conversation. But at the end of the
day, there is still a First Amendment, and that’s your challenge. EC is de
facto setting global standards for large platforms. The large platforms would
like something like GDPR because those costs are sunk. EC doesn’t have a 1A
hanging over them; EC is already looking at this at the member level. W/o the
Brits, it could happen within a few years.

On GDPR as a potential model to get big change out of
platforms: It is in fact impossible to comply w/GDPR. The reason it kind of works is that European
regulators sometimes let you fudge if they think you’re acting in good faith,
though that is not without its own political bias. The kind of strict
compliance regularly required by both US regulators and civil litigation is not
compatible with the kind of rules that you can borrow from GDPR type
regimes. Civil liability and especially
class actions are not a significant part of the European model. Having one national regulator to answer to is
very different than having to fend off lawsuits any time anyone thinks you
didn’t act fast enough.

Financial services people know more than internet services:
physical branches, physical IDs, etc. Scale: JPMorganChase has 62 million users
and makes $80/per user; FB has billions and makes $8/user. If you want people
to be charged $80/year, you can apply money laundering rules to FB and FB will
have branches.

As if we know what is a terrorist organization: the platform
knows there is a page. But there are anti abortion groups, anti police groups,
pro Palestinian, environmental groups w/radical fringe. Somebody calls them a
terrorist group. The initial hypo says that they use the service to recruit,
radicalize, and promote: the 1A protects a vast range of promoting violence.
Holder v. Humanitarian Law Project: Restricting interaction w/designated groups
is lawful only b/c people can set up independent promotion. Liability for this would
require platforms to remove content that anyone links to violence.

What if they knew it was a terrorist organization? Knowingly
facilitates, solicits, profits from.

How does Google “know”?

This scenario happens all the time. FB takes down a bunch,
misses a bunch. Consider how many women on the planet are named Isis. Terrorism
is one of the hardest things; FB needs its own list of terrorist organizations,
b/c some countries use their lists to suppress racial minorities. A lot of
speech is currently overcensored b/c lots of victims are Muslims related to
political Islam who are not terrorists and not enough people who matter care.

What if they knew someone was convicted of stalking on a
dating app? Assume the matching service
knew that but failed to warn. Would 230 immunize that? [Again we have just
decided to assume away the hardest part of the hypo: knowledge, as opposed to
accusation.]

There are a number of cases that speak to when an
interactive service is facilitating/participating in development, like
Roommates and Accusearch. You can’t state that b/c the service is being used,
it’s facilitating. It has to elicit the content in some specific way. If the
site is promoting content likely to be of interest to the user, you can’t jump
to that. Having seen OECD process on terrorism: when companies are saying we
need to be reporting on terrorist content, whose list should we use? There is
no consensus on who should be on the list. We can’t just call something a
terrorist organization w/o speaking to definitions and authority.

Agencies can issue guidance if laws are unclear. Can be
illustrative; could be multistakeholder process.

We’re hearing GDPR a lot with things like ICANN. We have to
make a decision about whether we will kowtow to the EU. If Russians/Chinese had
done GDPR, we’d be raising holy hell. Cost per customer is misleading beause the
customers are actually the advertisers [though the advertisers are not the only
people providing content/in need of screening, which is the source of the
problem!]. Google and FB are bigger than banks and making a lot of money. Conduct has to be where we start, not
content/bias. Knowing facilitation/profiting is easier, as w/FOSTA/SESTA.
Didn’t have the ability to pierce the veil w/Backpage b/c of 230. The reason Backpage
went down was a Senate investigation and then the DOJ, but state AGs couldn’t
do it and survivors couldn’t—stopped at the courthouse steps.

Gov’t should have a higher burden of proof for identifying
terrorists, but the blanket immunity is a problem. Tech platforms know that if
all else fails they can fall back on immunity. Hard cases are always extremely
complicated. Blanket immunity can’t be sustainable.

Shady company, MyEx, charged people to take down pictures
that had been posted of them, and sometimes they wouldn’t even take them down.
FTC shut down the site. There are ways to deal w/some of these issues that
don’t involve rebalancing 230. Law enforcement is super important here, and
resources for that are really important.

Are we concerned w/230 invoked against FTC?

State of Nevada was on MyEx case as well. This was §5
deception, not about third party content. We can make those cases. If the
companies are doing something, we can go after that. 230 doesn’t help them if
they’re actually doing the stuff. MyEx
didn’t raise 230, but it wouldn’t have helped.

DOJ 230 workshop part 3

Posted on February 24, 2020 by rtushnet

Panel 3: Imagining the Alternative

The implications on competition, investment, and speech of
Section 230 and proposed changes.

Moderator: Ryan Shores, Associate Deputy Attorney General

Professor Eric Goldman, Santa Clara University: (c)(1) means
no liability for 3d party content. Difference between 1st/3d party content isn’t
always clear. (2) protects good faith filtering and (2)(b) also helps providers
of filters. Exclusions: IP, federal criminal law, federal privacy, FOSTA sex
trafficking. No prerequisites for immunity as w/DMCA, no scienter required for
(1). Not claim-specific unless excepted. Common-law exceptions: (1) Roommates:
when sites encourage/require provision of illegal content. (2) Failure to warn?
(3) Promissory estoppel. (4) Anticompetitive animus.

Neil Chilson, Senior Research Fellow, Charles Koch Institute:
Taxonomy of possible regimes: what type of bad thing are we concerned about? Is
it illegal already or should it be? Who should be held liable? Person doing,
person providing tools? In what situations: strict, participation in creation,
knowledge, unreasonability? Can you get immunity back by taking action, e.g. by
takedown after notice? Concerns about incentives created. How do we protect
speech/public participation? Other countries don’t have 1A. Over-removal: ideal
outcome is sorting legal/illegal, but it’s hard to align incentives to do that.
Who makes the decision about legit speech remaining? Can companies decide for
themselves to remove legal speech? Does our approach disadvantage specific
business models? What affects on legal
certainty are there?

Possible legislative alternatives: (1) exemptions approach,
like PLAN Act focusing on homesharing sites, (2) bargaining chip proposals:
keep 230 if you do X; Hawley’s proposal for politically neutral content
moderation/EARN IT for commission to define X.

David Chavern, President, News Media Alliance: 230 was
designed to nurture new industry, became distortion: punishes folks who are
willing to take responsibility for their content. News publishers’
responsibility for content wasn’t hindrance to our growth; we were pretty good
at it [but see: Alabama in the civil rights era]. 230 means our content is subject to extreme
editorial control by major platform cos. Google News: someone has decided to
surface different content for you than for me. Their business value is
algorithmic judgments; they should be responsible for their judgments. They also
make decisions about reach. Small slander w/no impact could reach 10 people or 10
million, they should be responsible for that. Anonymity: a design factor that
prevents going after a speaker. If you’re a journalist, part of your job is
being abused online w/no redress, esp. if you’re a female journalist. Need incentives for quality, investment in
quality content. Zuckerberg says FB is b/t a newspaer and a telecom pipe—but they
can’t be neither. Not impressed by the billions of pieces of content:
they built it, that’s their problem.

Julie Samuels, Executive Director, Tech:NYC: As we think
about landscape, think through lens of smaller cos. Need to incentivize competition;
230 is crucial for that. Printing press allowed one to many and we’re in another
fundamental shift moment to many to many. Worried that we think we can put
genie back in bottle. It’s hard if certain industries don’t work like they used
to but that can be ok.

Goldman: Elevate existing benefits, even if there are also
costs. It is balancing; easy to overlook benefits. Millennials don’t know what
they have: don’t take for granted what the internet provides. Benefits haven’t
changed; we didn’t know what tech could do when 230 was enacted, but we don’t
know what it can do now. 230 preserves freedom to see where we can go.
Solves moderator’s dilemma, that if you try and fail you’ll be liable for
having tried. 230 still lowers barriers to entry. Baseline is not “can we
eliminate all online harms.” Internet as mirror: people are awful to each other
all the time. Might be able to find ways to make us kinder: Nextdoor is trying
algorithms to suggest kindness.

Chilson: Conservative principle of individual responsibility,
not tool responsibility: the normal way we do things in the US. Tort law
generally favors punishing actors over intermediaries—authors, not bookstores—social
media users, not platforms. Unusual to hold one person responsible for acts of
others; need good reason to do that. 230 doesn’t immunize produced content, as
newspapers are liable for their own content. Google is liable for its own
content; they just do different things. Services connect people on
unprecedented scale. Participation in group for people parenting a child with
clubfoot: b/c FB didn’t have to vet any post, that group exists and is greatly
beneficial to participants. Can’t build a business model around that alone, but
can build FB.

Pam Dixon, Executive Director, World Privacy Forum: Promoting
voluntary consensus standards. Just finished a multiyear study on FERPA, has
lessons learned. Striking that this area suffers from (1) lack of systems
thinking and (2) lack of research on fact patterns. Systems thinking: people
called in w/privacy harms in about 3-4 categories including (1) victims of
domestic violence/rape, fleeing/trying to stay alive; (2) people with genetic
based illness. It is rare to find a situation with one platform/issue; need
system analysis: public records, health records, educational records, other
platforms. Lack of fact patterning is a problem. OECD principles on AI: we all
learned that we were correct in our own way. Disagreement is ok but can we find
consensus? Individuals and organizations can lose trust in systems, platforms
can lose trust in gov’t. In our interest to solve trust problems. Voluntary
consens standards as a solution: not self-regulation. What if a more formal
process allowed all stakeholders, not just the big guys, to find consensus on a
discrete, observable, solvable problem?
Ability exists under OMB rules. FDA has recognized it for medical
devices.

Q: some proposals have carveouts for small & medium
entities. OK?

Samuels: size carveouts are worrisome. Small isn’t
automatically good. Swiss cheese approach. Small startups have big legal costs for
handling all kinds of issues; 230 is good at the pleading stage by making MTDs
relatively cheap, otherwise survival becomes difficult. Compare to the patent
troll problem: cottage industry of suing SMEs.

Chavern: we’re the only business mentioned in the 1A.
Incremental approach is justified. A few platforms matter more to society. Not a
lot of search, or social media, startups. Great scale = great responsibility.
Not irrational to start there.

Chilson: threshold concern: current antitrust investigation
is about search/social media killzone. If you have a threshold at which content
moderation becomes required, then the only safe way to cross that threshold
will be to get acquired. That’s not good. Big players are younger than many in
this room; they can come and go if competitive environment doesn’t cement their
market power into place.

Dixon: carveouts have unintended consequences. Right now no
unitary privacy test done by carveouts: should do that. Voluntary standards can
ID all stakeholders & discuss better solutions. Standard would be there if
you want to adopt it, not if you don’t.

Goldman: there are small companies in top 15 services, like
Craigslist, Wikipedia, Reddit. Some large cos have small UGC presence. Easy to
wrongly trip threshold. Concept great, translating hard.

Q: F/x on speech?

Chavern: Many complaints about speech we don’t like, not all
of it illegal. Freedom of speech isn’t freedom of reach. No inherent problem
with asking companies to be accountable about the act of deciding what to
disseminate. They’re deciding what you get to see, should be accountable for
that like a publisher. Weird that they get immunity for commercial decisions
that help their product. Unsustainable.

Samuels: That looks like a fundamentally different internet
experience. [Consider if you, an individual, had to have your posts go through
FB’s libel review before they’d post.] Social networks would be total chaos
without moderation etc. Real impact on users. Social movements and connections
happen now in incredible ways. Need to talk about end user experience.

Goldman: 230 can be the solution of how we interact as
humans; enables developments of better tools, services taking action on Gab.
Users on Gab, however, did have chilled conversations as a result. This is not
free. 230 enables diversity of editorial practices, not all like traditional
media. Finding communities that understand one another.

Dixon: Points to need for additional research and fact
patterning. Predictive speech is a coming issue.

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DOJ 230 workshop part 2

Posted on February 24, 2020 by rtushnet

Panel 2: Addressing Illicit Activity Online

Whether Section 230 encourages or discourages platforms to
address online harms, such as child exploitation, revenge porn, and terrorism,
and its impact on law enforcement.

Moderator: The Honorable Beth A. Williams, Assistant
Attorney General Office of Legal Policy

Yiota Souras, Senior Vice President and General Counsel,
National Center for Missing and Exploited Children: One main program is Cyber
Tipline, reporting mechanisms for public/ISPs to report suspected child sexual
exploitation. We analyze and make available to law enforcement. Receive reports
including CSE, trafficking, enticement, molestation. Largest category: CSAM.
Tremendous growth in reports: 2019, just under 17 million, w/over 69 million
files including video and images. Continues to grow. Many preverbal children as
well as younger teens.

Professor Mary Anne Franks, University of Miami: Cyber Civil
Rights Initiative: aimed at protecting vulnerable populations, online
exploitation, harm to women/sexual minorities/racial minorities. Civil rights
relate to tech. On nonconsensual pornography, active in (1) legislation where
needed, (2) working with tech cos on policies, (3) general social awareness.
For all tech’s good, have to be attentive to social media amplifying abuse and
civil rights violations. Bad actors, bystanders, accomplices, those who profit
from bads and hide under shield. Model statute issue: faced pushback from tech
& civil liberties groups. Many states take this issue seriously, thanks to brave
victims; rapid development in state law. Now up to 46 states & DC with
restrictions. Not solving problem: in many states the law is too narrow. Many
states require personal intent to harm victim, which is not how the internet
works. Average revenge porn site owner doesn’t intend to harm any given person,
just doesn’t care/interested in profits/voyeurism. 79% cases aren’t personal
intent to harm.

230 is the other big problem: trumps state criminal law.
Only way to maneuver around is federal criminal law on nonconsensual porn. We’ve
introduced a bill, not voted on yet.

Q. re reposting as harm to victims.

Franks: That’s one of the most severe aspects of attack: infinite
replicability. Much is initially obtained nonconsensually, via assault or secret
recording, or distribution without consent. It’s a harm each time. What happens
when a search on one’s name reveals all porn. 230 isn’t fulfilling its goals
for good samaritans. 230 doesn’t distinguish between helpers, bystanders, and
thieves. Intermediaries solicit, encourage, amplify violations. Also domestic
terrorism, misogyny, disinformation: harm to democracy/erosion of shared
responsibility for terrible actions.

Q: FOSTA/SESTA tried to address this for CSE. Impact?

Franks: we don’t see impact b/c we deal with adult victims,
not trafficking but privacy. Piecemeal tinkering on one bad form isn’t best way
to reform, makes unwieldy and sets up hierarchy of harms. Sex trafficking isn’t
the only bad.

Souras: we’ve seen Backpage go down, overlapped w/enactment
of FOSTA/SESTA. Immense disruption in market for child sex trafficking, which
continues. Feds did move against Backpage, no single co has risen up to fill
that lucrative gap. We’d love to see more federal action but there is
deterrence.

The Honorable Doug Peterson, Attorney General of Nebraska:
Trafficking online: federal prosecutors were very active in Nebraska; developed
a state law. No revenge porn prosecutions yet but can see issues with drug
sales and fraud, limited by 230. Nat’l Ass’n of AGs proposal: allow states and
territories to prosecute, just like feds: simple solution. Acceleration of
online crimes is significant, especially for young people targeted by apps.
Feds require a certain threshold; need to get aiders/abettors.

Q: challenges to law enforcement?

Peterson: some platforms: good cooperation. Murder case on
Tinder, which was v. helpful. Google & others have informed us and allowed
prosecution, esp. child porn. Enabled more thorough investigation.

Matt Schruers, President, Computer & Communications
Industry Association: What platforms are doing: over 100,000 people focused on
trust and safety. Large services have elaborate & sophisticated tech tools,
frequently made available to others. Participates with NCMEC and other private sector
initiatives. 10s of millions of reports to law enforcement. More investement
can and should be done—not industry alone. Many cases industry refers to law
enforcement don’t result in action: fewer than 1500 cases.

Q: why do companies report?

Schruers: no one wants service to be used for illegal
activity, regardless of law. There are bad actors, but a number of cases
illustrate that services that solicit/participate in unlawful content lack 230 protection.

Q: what about bad samaritans who don’t report their
knowledge: should industry set standards?

Schruers: There’s a role for best practices, much of which
is going on now. Don’t generalize a few bad actors.

Q: does 230 mean companies aren’t obligated to remove
harmful content?

Soares: most companies have separate reporting obligation
for CSAM. But co can choose to moderate or not; protected if they moderate or
they can moderate sporadically. Incentive promise has become aspirational.
There are cos that are partners, do tremendous work, but others turn the other
way recklessly.

Q: when did industry recognize existing problem and what did
it do?

Professor Kate Klonick, St. John’s University: doesn’t represent
any co. Her work doesn’t focus predominantly on illegal content but on harmful/violation
of community standards. There’s a huge difference in top 3 cos and many sites
discussed today. Different incentives to keep up/take down. FB etc. seek to
make platforms what people want to see over breakfast. Many incentives to
remove bad content—economic harms from bad media, users, advertisers who don’t
want ads to run against CSAM or revenge porn. Techlash in which it’s easy to
gang up on platforms. Since 2008 FB has been very robust on systems &
processes to avoid these. Not all tech/platforms are the same.

Peterson: AG of Pa had Tree of Life mass shooting; D was
using Gab before he struck. Looked at Gab’s engagement, but Paypal and GoDaddy
reacted quickly and industry response was so quick there was nothing to go
after.

Schruers: 230 protects those decisions by service providers.
Undermine that=no incentive to cut off.

Franks: distinguish b/t (c)(1) and (c)(2) [of course if you
only had (2) then any failure is held against you if you were correct once
before]. No incentive to act like good samaritans. They only grew a conscience
after public pressure in response to victims. Could have been avoided in first
place if design had been less negligent. Why should any of us be at the mercy
of corporations to see whether firearms are sold to a mass shooter? (c)(1)
doesn’t do anything to encourage cos to do better. Google is not a clean, well
lit place, nor is Twitter, if you’ve been attacked. Some people have always had
privacy, free speech, and ability to make money. But civil rights is about who’s
been left out. Descriptively not true that internet is by and large a good
place.

Q: Klonick says economic incentives align with moderation
for some. What to do about other companies where there’s a market for revenge porn
and CSAM?

Klonick: agree w/Shield Act: there are things to be done
with regulation and companies. This is a norm setting period: what to make of
what’s happening. Tech moves forward and our expectations change again. Concern
over acting quickly; hard to know ramifications.

Q: does 230 address safety?

Schruers: these trust and safety programs are not new. More
can & should be done. Prepared to engage w/ law enforcement; predate recent
bad press, part of doing business. There are a few bad actors, not entitled to
230, which creates exactly the right incentives by allowing policing w/o fear of
liability. (c)(1) does create issues when content is not taken down, but if it
were gone, there’d be nothing but takedowns, suppressing marginal voices and
unpopular views. We see this in other jurisdictions; no protection for lawful
but unpopular viewpoints. Requires balancing; there will be missed calls.

Q: what does more can & should be done mean?

Schruers: Asymmetry between reports & prosecutions; new
tools to be shared. Engaging w/IGOs around the world, OECD cooperation to
measure and respond to problems.

Q: CSAM reports grew a lot last year. How is there still so
much?

Souras: there is tremendous work being done by largest
companies, typically the best screeners & reporters. Once we drop off top
4-6 companies, there are 1000s of platforms around the world—chat, filesharing.
One problem: there is no level set. Moderation is helpful but completely
voluntary. Many choose not to screen. Larger companies also inconsistent over
time/across platforms/lack transparency.
When we talk about 100,000 duck bites, there’s a harmed person behind
every one of those cases even if also a business cost.

Q: Is automation/AI the answer? Small business burdens?

Souras: We have supported tests of AI/ML. We are far away
from that eliminating the proliferation.

Q: why so far away? Zuckerberg says 5-10 years.

Franks: there will always be promises around the corner.
Human judgment is required. Have to stop illusion of control from tech tools.
Problems are structural/design problems. Whether cos recognized the problem 10
years ago or now, this is the world 230 built. Do we think we’re living in best
possible world? Only people who aren’t sent death/rape threats can speak freely
because laws don’t stop threats and abuse from happening. Imagine any other
industry killing people w/toxic products getting away w/it and promising to fix
it later. FB Live was used to livestream murderes and rapes. Zuckerberg didn’t
think it would be misused. That’s unacceptable as an answer. Industry has been
treated like gun industry—immune from all harm caused. How long will we allow
this? Don’t look to tech for how serious the problem is. Industry keeps
promising tools but law is about changing human behavior for good. We’ve seen
that status quo has failed.

Klonick: The internet is everything that makes you mad about
humanity. Zuckerberg didn’t murder or rape anyone. He created transparency so
now we see how terrible we all are and now you want tech cos to clean it up for
you. Tech cos don’t make murder a product, they surface action that has already
taken place.

Schruers: Role of tech: sometimes held out as perfectable,
but not a cureall for humans. Journey, not a destination; ML/AI is being
deployed as we speak. They have false positives and false negatives. This
requires both tech and people.

Peterson: talk is cheap. Deeds are precious. Mississippi AG’s
concerns about prescription drugs, for which he sent Google CIDs, were rejected
and Google went immediately to 230. Message to AGs: you wont’ see behind our
walls. Tired of good intentions; would prefer cooperation.

Q: carveouts for federal prosecution?

Peterson: we work w/DOJ a lot; complement each other. We can
deal with smaller operations where DOJ may not have bandwidth. [Smaller
operations … like Google?] Request to
add states/territories to exclusion is important b/c a lot of these are small
operators. [There’s a lot of slippage here: is there a website that is just one
guy trafficking that isn’t also a content provider?]

Franks: No one is saying Zuckerberg is responsible for murder,
but there is accomplice/collective liability. [So FB is responsible for
murder?] Intermediaries aren’t directly causing, but promoting, facilitating,
and profiting from it. Collective responsibility: it takes a village to harass,
cause a mass shooting, use revenge porn. No need for complete difference from
real world rules.

Q: Encryption and CSAM: even if services don’t want it, they
can’t see it.

Schruers: Volume of reports shows that’s not the case. These
aren’t the only threats: beyond problematic content, fraud, crime, foreign
adversaries mean that other tech tools are required, one of which is encryption.
Safe communications protects user info: 82d Airborne in Iran is using E2E app
Signal widely used for secure communications because overseas communication
networks could be penetrated and transmissions b/t gov’t devices aren’t secure.
Encryption has a variety of lawful purposes: protestors, jurisdictions
w/problems w/rule of law. Balancing needs to be done but encryption is a
critical tool.

Q: FB Messenger could hide millions of reports.

Souras: E2E is necessary for some things but there has to be
a balance. 17 million reports: if we were in E2E environment for Messenger we’d
lose 12 million reports—children raped, abused, enticed undetected. There has
to be a compromise w/encryption rollout, or we lose 12 million children. [Each
report apparently reflects a different child. It is clearly correct to say that
encryption can be used for bad things as well as good. But the whole day I
never heard anyone explain what the balance would be if we have to balance: do
we only allow people we trust to use encryption? How does that work, especially
given what we know about how trust can be abused? Do we only allow financial
services to use encryption? How does that work? I don’t know whether encryption
does more harm than good or how you’d even weigh the bads against the goods.
But “there must be a balance” is not a plan.]

Klonick: PhotoDNA worked for a while; deplatforming means
that groups move and get smaller and narrower. Encryption does allow that. Autocrats
have learned to use platforms for surveillance and harm, and E2E helps with
that too. We need to think about full ramifications.

Q: should 230 be amended?

Klonick: works as intended. Was not just for startups: was
explicitly for telecoms, libraries, public schools. Nor was encryption not
contemplated: 1996 was mid-Crypto Wars I. Lots of sources exist outside of
encryption. These are critical tools for other equally serious threats. Mistake
to amend.

Peterson: Our proposal is simple: give us ability to support
criminal laws.

Schruers: 230 doesn’t prevent law enforcement action by states.
Prevents action against ISPs. If they’re direct actors, states can go after
them too. Fundamentally interstate commerce protection: services should be
dealt w/at federal level. If answer is resources, provide more federal
resources.

Peterson: let us go after bad actors aiding/abetting criminal
acts to clean up industry instead of waiting for industry to clean up itself.

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