Rebecca Tushnet

Taking advantage of known consumer ignorance is deliberately false, 2d Circuit rules

Posted on September 12, 2016 by rtushnet

Church & Dwight Co. v. SPD Swiss Precision Diagnostics,
GMBH, No. 15-2411, 2016 WL 4708179, — F.3d. – (2d Cir. Sept. 9, 2016)

Judge Leval deems this “an exceptionally well argued case,”
noting the same thing I did: Paul Clement for plaintiff Church & Dwight,
Seth Waxman for defendant SPD. (As someone else said, I guess that relative
dearth of SCt cases is really wearing on them.) I previously discussed the
district court decision finding SPD’s over-the-counter pregnancy test to be
falsely advertised here.
This decision happened fast, for the 2d Circuit—it was argued a few months ago.

SPD’s Clearblue Advanced Pregnancy Test with Weeks Estimator
is the first OTC pregnancy test to also furnish information as to how long (how
many weeks) a woman has been pregnant, which it does by measuring the amount of
hCG in her urine. But SPD used the
number of weeks since ovulation, and for reasons both historical and practical
the medical profession universally measures weeks since last menstrual period,
not since ovulation—a two-week difference.
They do this even when IVF is the implantation method and when ultrasound
is used to measure pregnancy duration.
The parties agreed that “when the Defendant’s Product and the woman’s doctor
are in complete agreement in estimating how long the woman has been pregnant,
the Product would announce a number of weeks that is about two weeks lower than
what the doctor would say.” The basic
falsity claim is that Clearblue falsely communicated that it used the same
metric and gives the same number of weeks of pregnancy as a medical
professional would.

Home pregnancy tests are Class II medical devices subject to
the requirements of § 510(k) of the FDCA.
This requires premarket notification to the FDA in order for the FDA to
determine whether the device is “substantially equivalent” to an existing
authorized device. The FDA may,
notwithstanding a substantial equivalence determination, require changes to the
product’s labeling or promotional materials designed to discourage potential
off-label use of the product that might cause harm to consumers.

The FDA initially issued a “hold letter” in August 2012,
expressing a concern that the “weeks indicator feature may provide misleading
information to lay population of users” because it would under-estimate
gestational age by an average of 2 weeks, which users might misinterpret. The
hold letter required SPD to remove the phrase “Also Tells you How Far Along you
Are” from the proposed box. Ultimately,
the FDA issued a clearance letter in December 2012, but required SPD, among
other things, to include a specific “conversion chart” explaining how a doctor
would date the pregnancy compared to the product’s results, using language
provided by the FDA. It also specified that the product’s results could not be
expressed as “weeks pregnant,” but only as the number of weeks since ovulation. In addition, the FDA required an additional
statement that “[t]his test provides a different estimate that cannot be
substituted for a doctor’s determination of gestational age.” Finally, the clearance letter said that the
“FDA’s issuance of a substantial equivalence determination does not mean that
FDA has made a determination that your device complies with other requirements
of the [FDCA] or any Federal statutes and regulations administered by other
Federal agencies.” FDA approval is required to modify or remove anything on the
package.

Original package

side panel

When the product was launched, it used its name—Clearblue
Advanced Pregnancy Test with Weeks Estimator—in large font, along with four
windows, designed to appear similar to the window that appeared on the product
itself. One window showed the word “Pregnant” on the first line and “1-2 weeks”
on the second; and so on. The front and
back of the package didn’t use the word “ovulation,” though one side panel had
the full FDA-required language. The
initial TV ad had the dialogue:

Woman 1: I’m pregnant.

Woman 2: Really?

Woman 1: Two weeks.

Woman 2: You already went to the
doctor?

Woman 1: Not yet, but I took this
new Clearblue test. It’s like two tests in one.

Woman 2: Oh my God, I think I’m
going to cry!

SPD’s website and other advertising was similar. After C&D complained to the FDA, the FDA
told SPD that it was marketing the product in violation of the limits imposed
by the clearance letter. The FDA told
SPD to remove the word “weeks” from the product windows and replace it with
“weeks along” outside the windows.

revised package

The revised package included a gray strip in the top right
corner with the phrase “Only Test That Estimates Weeks Since Ovulation*”. The
asterisk linked to the Indications for Use Statement on the side panel. SPD
complied with the FDA’s instructions about the windows. SPD pulled the TV commercial, but revised the
ad for the internet to remove the discussion of a doctor and Woman 1’s
declaration of how far along she was. SPD also modified its website
accordingly.

On appeal, SPD argued FDCA preclusion, because its marketing
materials had been reviewed and approved through the § 510(k) process. Pom Wonderful was to the contrary. The court of appeals noted that the Pom Wonderful court rejected the
government’s position as amicus that Lanham Act claims are not precluded by the
mere fact that the FDCA covers a product generally, but are precluded in
situations when the FDCA or the FDA, through its regulations, have
“specifically require[d] or authorize[d]” a challenged aspect of a label. Instead, the Court “rejected the proposition
that the FDCA’s or FDA’s regulation of a label creates a ‘ceiling’ that
precludes any further challenges to that label under other statutes.” Such a result would “distort Congress’s
intent to allow the Lanham Act and the FDCA to exist in tandem to serve the
distinct interests each statute protects.”
Competitors have market expertise the FDA lacks. And, as the court of appeals pointed out, the
FDA explicitly warned SPD in its clearance letter that its approval didn’t
constitute a determination of full compliance with the FDCA or other federal
laws.

SPD relied on PLIVA, Inc. v. Mensing, 564 U.S. 604 (2011), which
found preemption of consumer lawsuits against generic drug manufacturers under
state tort laws based on failure to warn, since FDA regulations require generic
drug labels to be the same as their brand-name equivalents. The Court found conflict
preemption even though the defendants could have requested permission from the
FDA to change their labels so as to comply with the state laws. It’s true that SPD will have to get the FDA’s
permission to change its label, but this isn’t a preemption case, and
preclusion involves different interests. “The uniformity concerns that drive
preemption doctrine are not necessarily applicable when two federal statutes
overlap.”

On to falsity. The district court found both falsity by
necessary implication and implicit falsity. Although none of the materials
expressly equated the product’s results with a doctor’s metric, in context,
they unambiguously implied that false message.
(In other words, when there’s a standard definition of a term, you can’t
avoid liability by redefining the word, whether that’s in mouseprint or by
using terms that consumers won’t understand are modifying the usual
meaning. Here, it’s a bit unusual
because consumers have no reason to think about the usual definition of
pregnancy duration, and the usual definition is weird—you start out 2 weeks
pregnant. But there are lots of things
we don’t know the details of—how MPG is calculated, for example—and just rely
on the existence of a standard for.)

SPD argued that its materials were “susceptible to more than
one reasonable interpretation” and thus not unambiguous. It claimed that a
reasonable ordinary person in the market for a home pregnancy test could
understand the claim to measure “weeks” as weeks-since-ovulation/fertilization “without
forming a belief about whether that measure is the same or different from the
convention used by doctors.” (Because
they wouldn’t know they needed to!) The
court of appeals was unpersuaded:

The issue is whether Defendant’s
measurement of weeks would be understood by reasonable consumers to measure by
a different metric than used by the medical profession. If an advertising
message means something different from what reasonable consumers would
understand it to mean, that message can be considered false.…The crucial point
is that a reasonable consumer would have assumed from the text of the Launch
Package, TV Commercial, and other associated advertising that the Product was
not giving a different number than a medical professional would give.

The court of appeals pointed out that the package didn’t “indicate
in any visible or clear way that the Product provides a different measurement
from a doctor’s.” The only mention of
ovulation and of the difference in dating conventions was in the Indications
for Use Statement on the side of the box, and the district court properly found
that this “was too wordy and ‘minuscule’ to render ambiguous the Launch
Package’s message that the Product provides an estimate of weeks-pregnant that
is consistent with the measurement provided by doctors.” So too with the other advertising.

Regardless, the district court also correctly found implied
falsity, given actual evidence of consumer confusion and evidence of SPD’s
intent to deceive. SPD “recognized and
understood that the Weeks Estimator’s result did not align with how doctors
express pregnancy duration and that this misalignment could confuse consumers,”
as extensively detailed by the record.

Notably, the court of appeals singled out statements by
Clearblue’s Brand Manager that, the district court found, indicated a
deliberate attempt to evade FDA limits and convey a false message. As the FTC says, don’t be cute. When discussing promotional materials for
CVS, the brand manager stated that “we can’t actually link together the weeks
and pregnant in the way it was on the last couple. What you can say is the only
test that estimates weeks, or the only test that also estimates weeks, then the
consumer will see Pregnant 1-2 Weeks in the windows and put it together.” In
another email, in response to a suggestion that an advertisement say “Find out
how far along you are,” she wrote, “This is a tricky one, but the FDA doesn’t
actually want us to say that. I think it can be phrased as a question …, or
we need to use the ‘estimate weeks’ language.”

This evidence of deceptive intent was sufficient to support
a presumption of consumer confusion supporting a finding of implied falsity.

The revised package was still subject to the implied falsity
finding, based on a consumer survey that tested the revised package and found
that “16.0% or 17.3% of participants… answered both that the [P]roduct
estimates the number of weeks a woman is pregnant and that the [P]roduct’s
estimate of weeks is the same as a doctor’s estimate of weeks-pregnant.” SPD’s best argument was that the survey was
flawed because the survey didn’t test whether these beliefs came from respondents’
preexisting erroneous beliefs about the way pregnancy is measured.

But the truckload of evidence that SPD was “aware of this
widespread consumer ignorance and took no effective steps to guard against
misunderstanding of Defendant’s messages attributable to that ignorance” meant
that it wasn’t error to rely on the survey.
Given such ignorance, SPD’s own messaging was deceptive insofar as it did
nothing to tell consumers that what it measuredwas a different measurement from
that used by doctors. “It makes no difference whether the widespread consumer
ignorance predated the Defendant’s Revised Package or was caused by it.” The revised package implied that medical
professionals would measure pregnancy the same way.

Materiality: I thought the Second Circuit was well-settled
that its “inherent quality or characteristic” language was just materiality,
but SPD argued that the district court found only the former. Accepting that
the issue was somewhat unsettled, the court of appeals found that, even if it required
an additional showing that deception was “likely to influence [consumer]
purchasing decisions,” the district court’s findings of likely harm to C&D
satisfied that requirement. “While the
materiality of the falsity and the likelihood of injury to the plaintiff
resulting from the defendant’s falsity are separate essential elements, in many
cases the evidence and the findings by the court that a plaintiff has been
injured or is likely to suffer injury will satisfy the materiality
standard—especially where the defendant and plaintiff are competitors in the
same market and the falsity of the defendant’s advertising is likely to lead
consumers to prefer the defendant’s product over the plaintiff’s.”

Here, the district court expressly found that C&D lost
sales from SPD’s false advertising. “If
consumers, faced with the choice to purchase either the plaintiff’s product or
the defendant’s, are likely to prefer the defendant’s product by reason of the
defendant’s false advertising, the falsity of the defendant’s advertising is
material to the plaintiff’s Lanham Act claim.”
[Query: how does this square with puffery doctrine? Can you show that a
statement isn’t puffery by showing that it’s material?]

The court of appeals found it “entirely reasonable to expect
that, for a significant number of women interested in learning whether they are
pregnant—especially those who have not previously been pregnant or are
otherwise ignorant of the details of the reproductive cycle—the information
that Defendant’s Product will tell them something different from what a doctor
would provide would make them less likely to trust Defendant’s Product, and
more likely to purchase from Plaintiff, Defendant’s closest competitor.” Indeed,
the evidence indicated that this was “precisely the risk that motivated
Defendant to avoid making clear to consumers that its Weeks Estimator gave
information different from what a doctor would give.”

SPD argued that C&D’s lost market share wasn’t due to
falsity, but rather to the important new feature SPD introduced into the market. Even if that was somewhat true, though, the
evidence that concealing the truth improved SPD’s market share was sufficient;
the court hadn’t awarded damages, in any event.
Also, deliberate deception in a two-player market makes a presumption of
injury appropriate, and here the parties were direct competitors in a “sparsely
populated market” in which other brands (manufactured by a co-owner of C&D)
represent only a small portion of the market.

Finally, SPD challenged the scope of the injunction. Among other things, the injunction required
SPD to include with the test a specified forty-one-word statement clarifying
the difference in the estimates, in a particular position and font size; prohibited
SPD from using several phrases in its advertising, such as “weeks pregnant,”
“weeks along,” or “Weeks Estimator”; required SPD to deliver a corrective
notice to all retailers and distributors with a copy of the injunction; required
SPD to publish Internet banner advertising prominently displaying its logo and
stating that a federal court has determined that SPD “engaged in false
advertising”; and required SPD to produce a video explaining the difference
between its product’s and standard pregnancy length estimates and stating that
“a federal court found the manufacturer … to have engaged in false
advertising,” and to make it prominently available on Defendant’s webpages,
YouTube channels, and Facebook page.

SPD argued that the corrective notices were excessively
harsh. But, especially given the
intentional deception findings, the court of appeals declined to say that the
injunction was more than curative. Further, SPD argued that the district court abused
its discretion in the sweeping scope of the relief it ordered, especially in
view of such factors as the relatively brief time the public was exposed to the
deceptive materials and the time passed since their withdrawal. “Although
Defendant’s argument is not unreasonable, and less intrusive requirements might
well have sufficed, we cannot say the court’s orders constituted an abuse of
the court’s wide discretion to fashion the terms of injunctive relief.”

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Plumb disappointing: 9th Circuit reinstates 2D-to-3D copyright claim

Posted on September 12, 2016 by rtushnet

Direct Technologies, LLC v. Electronic Arts, Inc., Nos.
14-56266/14-56745 (9th Cir. Sept. 6, 2016)

Electronic Arts makes the game The Sims, and contracted with
a production company, Lithomania, to produce a USB flash drive shaped like a
“PlumbBob,” a gem-shaped icon from The Sims to promote a “Collector’s Edition.”
Lithomania in turn contracted with Direct Technologies to produce a prototype, then
shipped that prototype to a company in China to make essentially the same flash
drives for $0.50 cheaper per unit than DT proposed, while lying to DT about the
fact that it had been cut out of the deal, apparently in order to get it to
sign agreements including IP licenses. Lithomania told EA that it had received
a vendor agreement from DT, “so IP’s are all protected.” EA responded, “Great.
. . . Protect us all.”

PlumbBob icon

USB drive

DT ultimately settled breach of contract claims with
Lithomania, then sued EA under the federal Copyright Act and the California
Uniform Trade Secrets Act. Here, the court of appeals reverses summary judgment
for EA on copyrightability, in my opinion mistakenly, and affirms summary
judgment for EA on trade secrets given that the design at issue did not derive
independent economic value from being kept secret. EA couldn’t get attorneys’
fees on the trade secret claim, though.

Background: When a player controls a specific character, the
PlumbBob appears over the character’s head, which is “an iconic symbol of The
Sims.” According to the court, EA has a copyright in the PlumbBob (separately
registered?). Thus, the question was
whether the USB flash drive had enough independent creativity to be a
copyrightable derivative work. DT
alleged two creative aspects: (1) the USB drive had 12 equal sides, whereas the
icon had 20 unequal sides; and (2) DT designed the USB drive to fit into the
PlumbBob with a “futuristic cut away look . . . at a unique angle.”

USB design

Protection requires nonfunctionality, separability, more
than trivial originality, and lack of any effect on the scope of copyright in
the preexisting material.

DT argued that the fit of the flash drive had a “futuristic
cut away look . . . at a unique angle” which was nonfunctional. The court found
that there was a genuine issue of fact about whether the design was merely functional
or utilitarian. The “mere feature of having a USB flash drive that can be
removed from the PlumbBob object” wasn’t copyrightable. But the manner in which the USB drive was “cut
away” was potentially non-functional. [This is the exact kind of reasoning our
brief in Varsity Brands argues shouldn’t ever constitute separability: the
choice, however aesthetic it might be, is coextensive with the fact that it is for
an object containing a USB drive, and thus is not separable from the
utilitarian aspects.]

The record showed that DT considered four other designs, and
the designer submitted a sworn declaration explaining that his ultimate choice
was made “for aesthetic reasons.” A jury
could find that this design feature was “truly ‘artistic.’”

Alternative designs

As for originality, having 12 or 20 sides wasn’t an original
choice, since EA’s versions of the PlumbBob already included both as the icon
changed over time. “Even assuming that DT’s version has a slightly different
shape than the drawing presented by EA, we have held that a character’s copyright
encompasses its ‘distinctive character traits and attributes, even if the
character does not maintain the same physical appearance in every context.’” However, there was a genuine issue of material
fact about whether “the manner in which DT designed the USB drive to fit into
the PlumbBob object” was sufficiently original to merit protection. [Again, note how this framing makes clear the
inseparability of the aesthetic choice from the fact that the choice is about how to design the useful object.]

EA argued that the design was so similar to the PlumbBob
that if it were copyrightable, DT would have “a monopoly on all USB[ drives]
shaped like the PlumbBob, and perhaps even any other 3-D embodiment of the
PlumbBob.” The court of appeals
disagreed: DT would only have “a copyright in its unique contribution—the
artistic manner in which it designed the USB flash drive to fit into the
PlumbBob object.” DT’s copyright “would obviously not preclude others from
making a 3-D PlumbBob without a flash drive.” [If this is true, again, then
there’s no separability—if the only originality comes from a choice that can’t
be replicated without also putting a USB drive in the object, then the
utilitarian design isn’t separable.]

A jury could also find that EA wasn’t a joint author, but
only in a position to offer suggestions, and that DT’s design had “audience
appeal” (one factor in the 9^th Circuit’s joint authorship inquiry). Moreover,
as to the IP license in the vendor agreement with Lithomania, a jury could find
that, “if the contract was fraudulently induced, such that it was invalid from
the beginning, there would be no valid contract for EA to enforce.”

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Another court finds that injury from fake “sale” prices is redressable

Posted on September 12, 2016 by rtushnet

Le v. Kohls Department Stores, Inc., 160 F. Supp. 3d 1096
(E.D. Wisc. 2016)

Le sued under various state consumer protection statutes
(and unjust enrichment), alleging that Kohls falsely advertised “sale” or
“discount” prices off of the “regular” or “original” item prices, which were
not in fact regular. As a graph from Consumers’ Checkbook/Center for the Study
of Services, an independent, nonprofit consumer organization, indicates, “at
Kohl’s, the sales often never end”:

CC graph

Le alleged that Kohls’ marketing tactics are economically
harmful because they deceive consumers to: (1) buy products that they would not
have bought “but for” the illusory “sale”; or (2) pay more for products than
they would have paid had they been fully informed of the actual “item price.”

Kohls moved to dismiss, arguing that Le didn’t offer a
legally cognizable method of calculating his claimed restitution. Kohls argued that restitution would require
proving a difference between the value of the products Le bought and the price
he paid. He didn’t allege any such
difference.

The court, however, concluded that California’s UCL and CLRA
didn’t confine restitutionary relief to that available under the price-to-value
method. The appropriate measure of
recovery depends on the circumstances.
Furthermore, determining the proper calculation would be inappropriate
at the pleading stage, and the court reserved questions about how to factor in
the value of the products that Le received.
The measure of his harm, as alleged, was that he bought a product that
he paid more for than he would’ve been willing to pay if he’d known the truth,
which is a measure the 9^th Circuit has endorsed. Likewise, the court allowed Le’s claims for
injunctive relief to continue. Although
he was aware of the alleged scheme, that wasn’t enough, because to use that as
a reason to preclude injunctive relief would vitiate the intent of California’s
consumer protection law. Le properly
alleged the likelihood of continued harm because he alleged that the pervasive,
ongoing scheme made it impossible for any consumer to tell what the true price
was. Given that Le wasn’t complaining
about a specific product but a broad practice,

the Court is unclear just exactly what
Le would be expected to be “aware” of in order to avoid future harm from Kohls.
For example, should Le be “aware” that housewares are deceptively priced, while
men’s apparel is not? Should Le be “aware” that Kohls’ holiday sales are more
egregiously deceptive than their day-to-day offers? These hypothetical
questions underscore the point that discovery is necessary to parse out the
salient facts in relation to Le’s claim for relief.

The court also allowed Le to claim on behalf of a
multi-state class of consumers, at least under Article III at this point in the
case; choice of law issues remained to be decided. The court acknowledged Kohls’ “prudential” concerns
about the effects of this kind of claim—presumably settlement pressure—it pointed
out that, via CAFA, Congress “authorize[d] federal judges to resolve
big-stakes, multi-state class actions.”

The Wisconsin Deceptive Trade Practices Act claim survived
because, though it required statements “made” or “disseminated” in Wisconsin,
Le adequately pled that Kohls’ principal place of business was in Wisconsin and
that its “acts, practices and policies pertaining to the advertising,
marketing, and sale of merchandise…were established and emanated from
Wisconsin.” Even if Le “saw” Kohls’ allegedly deceptive statements in California,
the ads at issue were “made,” and then “disseminated,” by Kohls from its
Wisconsin headquarters.

Unjust enrichment claims also survived in the alternative.

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Stanford Sociology and Psychology of IP

Posted on September 10, 2016 by rtushnet

Session 5: Fairness, efficiency, and distributive justice

Discussion leaders: Stephanie Bair: Concepts of
ownership/justice in ownership may be universals—studies of children across
cultures. Purpose of IP as understood to
be to prevent plagiarism—asking for permission is sufficient, though, in many of
these lay understandings. Organizational context studies: Also a distributional
component to fairness. Contributors to project: rewards distributed unequally =
offended sense of justice. Creators perceive work environment as fair if
there’s respect and trust. A procedural aspect: more likely to think
distributional outcomes are fair if the procedures used to determine outcomes
are non-arbitrary or otherwise perceived as fair.

Psych literature can link efficiency and fairness. Fromer
proposed: moral rights are incentives for creators b/c creators really care
about them. Silbey’s interviews
w/creators found much the same. Organizational behavior literature backs this
up. In companies, people choose
voluntary creative behaviors more often when they perceive the work environment
as more fair; they experience more intrinsic motivation. Leads to objectively more creative outcomes. Might be important to pay attention to
fairness to continue intrinsic motivation.

We think more innovation is good; if asked why, we might say
it contributes to economic growth/social welfare. If you had distributional
concerns, you might think we could use tax to deal w/distribution. But there
are people who take issue w/the idea that economic growth is necessarily a good
thing or the best way to measure welfare. Maybe we should be using measures of
happiness or subjective well-being (Buccafusco), or a capabilities approach as
Sunder has argued. How/to what extent
should IP be promoting these alternative visions of social welfare?

Rob Merges: W/studies you can say that policy implications
are unclear; if you reveal an instinct, that doesn’t mean that instinct should
be driving policy, since some of our instincts need to be controlled. But it’s
a good case study: we tend to interpret empirical work in a way consistent
w/our normative starting points.
Consumer of literature on natural instincts, so needs to be
careful. Still thinks there’s something powerful
in the idea: when empirical work lines up with philosophical theories about the
right or need for ownership, that’s two different methodologies pointing in the
same direction.

Strongest finding across methodologies: sense that we don’t
give enough respect for attribution in the US.
US is deficient in reflecting intuition that attribution is important.
That’s low-hanging fruit—people will take attribution rights in place of extra
compensation. Almost all the studies—experimental, interview, theory—show that
it’s something we really should care about. Policy insights would say: we
probably got Dastar wrong, and we
need some kind of more formal attribution right in US IP.

When we look at how important design is in the modern
economy—our theories about TM are running into empirical evidence. There’s this sense that design is important
and we want to encourage it but our TM theory is stuck in consumer protection
mode and we’re having trouble adapting it.
If theory tells us that all this solicitude for designers isn’t what TM
is about, one response is to kick it out; but if we want to respect design
work, maybe we should look at the existence of the design profession exploring
new ways of being creative and adjust our TM theory rather than adjusting that
evidence. There are also other areas
where theory is out of step w/empirics; need to be more flexible.

Case about how we interpret the studies we used. In the MRI
studies, associations around brands light up same part of brain that responds
to religious icons. It’s easy to
criticize that; materialist might say religions are very old brands, or might
say that brand designers have tapped into something very deep, which takes a
lot of talent, and that means it’s worthy of protection [the protection we
grant to religions to bar other people from using their icons? Herein of “if value, then right.”]

Innovation w/o IP versus IP without IP. IP as exception rather than rule (older
version); IP in context (becoming more modest about role of formal IP rights;
willing to substitute with tax policy, credits, etc. if it can do the job
better). Related to negative space, but broader policy canvas: contextualizing
IP as a modest part of a big set of social norms and a big set of policies.
Requires some humility in our field.
Private initiatives like the movie title registry MPAA runs; agreements
not to sue (smaller scale)—that’s transactional efficiency in the presence of
IP. Strong form of IP w/o IP is where it doesn’t exist or has been replaced by
informal norms. Entertainment industry is intermediate b/t complete stranger to
stranger interactions and very close-knit organizations like roller derby. Spectrum from anonymity to somewhat shared
interest to close-knit; IP plays into norms differently in those situations b/c
social distance is a fundamental idea in sociology.

We have to be careful about areas where IP seems to have
been displaced: don’t extrapolate close-knit groups to other areas like
intermediate or anonymous. Norms only work where there is social proximity and
the prospect of some sort of sanction.
Book on licensing samples by Peter DiCola: ethnography of that little
part of the music industry, but we need a lot more like that to sort out the
role IP plays.

Property instinct literature: I see that IP w/o IP reflects
intuition about credit/attribution that need not be formal IP; the fact that
people reinvent something like IP when IP doesn’t work indicates it’s in sync
w/people’s basic instincts. When we see
IP intruding into these spaces, we have to be careful—won’t always displace
norms; formal IP may be useful in final period problem when people are leaving
the community/won’t be repeat players. Case law in those contexts won’t be
representative and won’t displace social norms, but it’s a special situation.

Distributive justice: seems to me that lots of what we’ve
been talking about takes the form of worrying about old tradeoff b/t consumers
and rightsholders. Need for fairness
leads him to talk about proportionality; details of IP rights are important b/c
they’re where we carry out the job of recognizing the property instinct and the
need to limit it. Property instinct =
not libertarian strong form; people’s intuitions are that property should exist
but also that it should be limited.

Meta-points: care in mining the literature. Mindful about what’s trendy. Brain studies =
materialist moment. Be careful about making big jumps from study to policy
conclusions. Studies aren’t designed to
tell us anything about IP policy: interpretation of those studies/parts of
brain lighting up has to be careful. We
have our own group dynamic and we’re not immune from the phenomena we study.

Commentators: Mark Lemley: If fairness matters to
production, that needs to be part of our incentive theory. But you can
overstate the degree of what’s learned v. social. Fairness is socially
constructed and defined. Many things we view as fair today would be viewed as
unfair 100 years ago and vice versa.
People 100 years ago would probably take 100 years’ ago’s IP laws as
largely fair, with perhaps some outliers; same today.

People care less about money and more about credit than the
law does. That’s a lever point for change in multiple different
directions. One solution: stronger
attribution right, but probably not by reversing Dastar. Also suggests low-hanging fruit to reduce social costs by
reducing economic control that we give to reduce deadweight loss w/o reducing
incentives.

Also consider fairness to consumers. Easier to think about
fairness to creators, or fairness as between early and late creators, but consumers
have to think they’re getting a fair deal too. Instinctive moral reaction to 6x
price increase in Epipen that kills kids; same thing seen in internet piracy
cases, where personal justifications for filesharing are about price & greedy
people, and some are about ability to have access to information.

Fairness maps differently to patent rules than to the rest
of IP, b/c patent rules are so far removed from our instinctive reaction.
95-98% of patent lawsuits outside pharma are against independent innovators,
not even alleged copiers; this doesn’t align fairness instincts. We tend to
align instincts by telling implausible stories about “theft.” Either we need to think about why rules are
different and realign them, or come up with a story why this should be treated
as fair. There’s a perfectly good
economic story in which it’s hard to administer an independent invention
defense.

Distributive justice: I resist this even more than fairness
as an economist, not b/c it’s not important but b/c economist’s instinct is to
first think about expanding the pie and then separately thinking about
expanding it. Literature indicates that people generally aren’t willing to
think that way and are upset about expanding pie if it’s sufficiently unfair (e.g.,
dictator game and rejection of beneficial deal). That said, enlarging the pie is generally a
much better idea in the long run—modern tech v. equally distributed 18^th
century tech. Average person here is
better off than richest people in the world in 18^th c.

IP mostly hurts rather than helps distributive justice.
Increases costs of things to poor people, decreases access. Also it is very
strongly oriented towards winner take all system: music, movies, tech. Maybe we compensate for that by having
outside-IP systems, but badly enforced IP might also be the best of all worlds:
people who can afford to pay for music pay for music, but poor people who
otherwise might not have access get access for free through “piracy.” May not
be a sustainable equilibrium, but consider when infringement promotes
distributive justice.

Contracting around IP/IP-free zones. Important to consider what we should put into
the legal rules and what we can rely on the non-positive law to do. People take
strong IP regimes and contract down; people take weak IP regimes and contract
up. It doesn’t follow that we should have strong or weak rights. It may be that
baseline legal entitlement matters somewhat less if people are free to move
regimes to a happier place.

Greg Mandel: Policy justifications for IP are richly
contested. Somewhat of a cultural
debate; very hard to resolve, see Lemley’s discussion of “Faith-Based IP.” Attributions sounds good to people of various
backgrounds: natural rights, fairness, efficiency: a cheap right to provide in
terms of social costs while providing incentives. We should think about these
overdetermined policies that can mean something different to different people
and may be easier to agree on. Very hard
to move the needle in people’s beliefs. Patent attys tend to believe
overwhelmingly in the incentive theory, but we’re never going to give everybody
that experience. His guess: many policymakers, judges lean more towards the lay
side of the camp and have more disparate views about justifications than
experts.

We still have to worry about lots of distributional concerns
and other norms of fairness; there’s agreement among people from different
perspectives that IP at a minimum shouldn’t inhibit creativity and innovation,
and should support it.

RT: case against attribution rights. Try and write it! I did, and I ended up concluding that I couldn’t. Lemley’s point: Some fairness rules can’t be
written into law, at least not law as the US system knows it (maybe civil law,
but I don’t think they’ve obviously done a bang-up job either, and even if you
did think that the differences in systems are so great that I don’t think we
could project success in US). This
debate was had in family law (divorce, ok reasons for) and 1A (defamation, often
too bad so sad) and we generally decided it was a better idea not to try to
match fairness norms exactly because of the systematic biases in who’s making
decisions and information/administration costs borne by the system. Family law’s
embrace of no-fault divorce: Makes the system look bad to be constantly judging
fairness w/in private relations. I urge
everyone who thinks this is worth exploring to sit down and explore it: draft
what you think should be done.

McKenna: What we make of the attribution desire: is that a
claim that we aren’t currently getting enough output? Is it a claim that we
should give credit regardless b/c it’s right?
The practical difficulties are enormous. To what would it attach?
Anything w/snippet/substantial similarity?
It guarantees repeated conflicts b/t TM and ©; attribution of things
other than physical entities; every time TM law has encountered that, it’s
struggled to find a meaningful answer.
It’s not clear we’re all talking about the same thing—authorship,
ownership, © concept, TM concept?

Buccafusco: There’s nothing about IP that makes us
welfarists, Kantians, etc.; nothing intrinsic to IP will decide that. We still need to distinguish preferences and
welfare. You could think satisfying
preferences is always conducive to welfare, but I don’t think so; we need to
talk about why that might be. Anxious about idea that concerns about fairness
are valuable corrective to economic accounts of IP; that people value stuff is
not evidence that it is good for them in the absence of other evidence. These
intuitions are likely to be weak proxies, esp. where strength of preferences
can be manipulated by framing of question.
Hard to say anything useful about welfare effects—my guess is that music
is good for welfare, but all 18-25-year-olds are likely to like the music they’re
given; no matter what’s popular, it will be popular. Lemley says: think instead about enlarging
the pie. But he’s not confident we can
do that either. At what point do we have
“enough” movies? Not clear as a matter
of © law, or on the consumer side, even though we might think that we can judge
producer side welfare. Sometimes
creating is good for people and they get pleasure for it, and that’s a value
that counts. But it might be easier to say things about consumer side benefits
of patent law. Length of their lives
matters.

MacCoun: working on a computational account of distributive
justice. There’s a remarkable consensus about what procedural justice is.
Distributive justice is quite different.
You need to define your version.
Allocation by need—there are different ways of interpreting that; same
as to allocation proportional to contribution; Pareto-type rules of making no
one worse off; equality (minimizing difference, maximizing joint gain), and so
on. You recognize these all.

Sprigman: Sprigman, Buccafusco & Burns on what’s a name
worth: there’s a puzzle at the heart illustrating difficulties
w/attribution. We ran a photo contest w/real money. They could choose $ or less
$ plus attribution. We showed they valued attribution. Second experiment, which varied the baseline:
we told them once that they had the right but website might want to buy your
attribution right; once that they didn’t have the right but could buy it. 4 to
1 difference in valuation: when people had the right they wanted 4x as much as
they were willing to pay to get it. Default rule really constructed the
valuation. What do you take from that?
Previous experimental work showed valuation gap in transactions—authors demanded
more than buyers were WTP. Default rule
of no attribution right will tend to push the parties closer together; European
rule will drive them further apart. Seller
will value the right higher, reducing the number of transactions, all else
being equal. Upshot to us: well, it’s
hard to know, but there will be a cost associated w/attribution: you might
satisfy preferences endogenous on the rule themselves but drive down a market
that will clear at a lower rate of output.
If you’re Candide, everything happens for the best, but he thinks that a
preference so heavily endogenous on the legal rule should be treated
differently than a less manipulable preference.

Silbey: attribution is a place where norms play effective
and strong role; communities police them very well. It’s a place where shaming
works well. Although I see the anxiety a lot, and the feeling of violation,
private ordering has grown up around those misalignments w/law that have been
very effective.

Discomfort w/fuzziness of fairness and distributive justice—but
efficiency is a social construct too. It’s just dominant (among us). That doesn’t mean we should align whatever
the dominant fairness mechanism is today with our IP system. When there is profound misalignment, for
example in the piracy context—we have a rule of law problem that’s profound. We
shouldn’t just accept that we have “pirates.”
Illegal aliensàundocumented immigrantsànew policies. You can
imagine a reframing around infringement, a new word that might start changing
the fairness construct to make it look no longer like an infringement. Misalignment can be a canary in the coalmine
about disruption of categories that are necessary to the rule of law. ,”We can’t
have a system that depends on the existence of rule-breakers. [It’s called “how many municipalities fund
their systems,” which is not to say I disagree with the normative conclusion!]

Pedraza-Farina: Huge emphasis on attribution with
oncofertility coalition (boundary crossing organization). How do you deal with
patents? Informant said that she wanted
to be on patent to get credit, but she also didn’t want patients to think she
was conflicted w/them, profiting from their illness—credit had good and bad
features. Attribution is related to patents, but there’s a dark side.

Lemley: there’s attribution litigation even when the
economic rights are assigned; people have even tried to litigate about the
order of names on the patent, and a few have tried to get their names off
patents.

Burk: If attribution is fairness, maybe we don’t try to
draft amendment to copyright law, but maybe we have to try to create conditions
where people can bargain into the rules that make sense for them—labor law as
the solution, or employment law, or some other form of law. Maybe © and TM and patent are all different
situations. Germany has a required royalty sharing agreement with
inventors. Other forms of law.

Ben Depoorter: fabled double distortion argument: if you use
law for distribution you get inadvertent effects on allocative decisions w/r/t
that activity. W/IP the assessment is even more difficult b/c we understand so
little about incentives. Maybe it doesn’t
matter at all, according to our research, but that’s a hurdle. Ex ante, if you have a notion about
inadvertent effects, that’s why you get so much pushback about attempts to
change distribution in IP. If we don’t
know what promotes creativity, we also don’t know what distorts it.

Greg Mandel: Attribution as a concrete potential
suggestion. Push back against critiques:
I hardly think it’s a panacea, but we’re starting to see potential. Re: challenge of drafting, might be true but that’s
b/c your standards are higher than those for ordinary statutory drafting. The fact that would be highly imperfect isn’t
necessarily a reason not to do it. [I think it’s a reason an attribution right
codified into law is likely to turn out to be more trouble than it’s
worth.] Sprigman & Buccafusco seem
to describe an endowment effect. All IP rights will do that. If our goal is to
make rights transfer easer, any reduction in rights would accomplish that goal.

MacCoun: it’s 2x as large as the standard endowment effect.

Buccafusco: when people own stuff, they may value it in ways
conducive to welfare/consistent w/preferences, or they may not; different sorts
of people differ in their reactions. If
I as mug owner am differently reactive to endowment effect, it might be less
good as a proxy for my welfare than it would be in other hands. We’re anxious
that the people given these attribution rights are subject to higher levels of
bias. When you’re trying to use WTP/WTA
as measure of welfare and they differ, you need a story about which one to use.
Sometimes there are pretty good stories.
Our other studies: Valuation anomaly in creativity studies comes mostly
from overoptimism; that’s just a bias leaving money on the table. If the higher
valuation is just “this is special to me” we are more likely to say that’s not
really a bias.

Mandel: we could provide a very weak remedy to deal w/this.

Fagundes: what do we do about knowing people’s intuitions
about IP? Normative and descriptive must
be sorted. But you can still say something:
(1) be aware of preferences/intuitions as a constraint in the same way you’re
aware of gravity; if you aren’t paying attention it will screw up what you want
to do, without having normative force. (2) proxy for empirical evidence of
actual preferences, but it’s still a descriptive project that constrains
normative arguments you might want to make.
My paper was called IP norms in roller derby, but it was really about
property norms, not patent or TM. We
might identify different norms in each realm; what constitutes welfare in one
domain might not translate into another, for example technical innovation v.
artistic creation. Keep profound
differences in mind.

Peter Lee: Universities in patent licensing often reserve
rights for nonprofit research, and for use in the developing world: private
actor working to increase distributive justice. Do we want access to IP, or to
fruits thereof? Do we want communities to have their own IP?

Mark Suchman: Robin Hood loophole: idea that rich will pay
for the rule and the poor, judgment-proof, get the benefit of breaking it—redistributive
role for the judgment-proof. But there is this other story about how the rules
affect the legal and illegal, which is much more symbolic. The rule that
creates those who can pay as legal and those who can’t pay as illegal has
broader effects. Later in life, the
judgment-proof college student may be stigmatized by past history. On one hand, I like the flexibility that
gives you in crafting policy, but there is a symbolic dark side. [Consider who gets prosecuted for other “lifestyle
crimes” like walking in the street instead of on the sidewalk.]

Lemley: if system is only working b/c we turn a blind eye to
all these acts = need to change the law.

Suchman: consider disparate effects of Prohibition on
certain ethnic groups.

Silbey: Tim Wu’s argument about tolerated uses—traceable nature
of digital use means there’s less opportunity for obscurity, which is another
reason to be concerned.

Sunder: written about composer of “The Lion Sleeps
Tonight,” Solomon Linda, whose identity was erased as the music
circulated. His style was considered
traditional and “born” to the public domain, even though it was unique/unusual.
Implicit biases, global inequalities should affect our consideration of
attribution. See it also w/jazz and race
issues around patent/who’s an inventor.

RT: Robin Hood: also social effects on rights holders of
constructing it as a right: we see them conscripting intermediaries, including
our universities, and arguing that technology needs to be deployed to do the
enforcement work that law can’t do. Imagined
plaintiffs play a huge role in these debates: the big owners who come to
Congress say they’d never sue really sympathetic plaintiffs, and largely but
not entirely that’s right, but they’re not the only ones who’d use the rights
they’re asking for. We need stories to
match their stories, because anecdotes end up making policy. And we need our anecdotes to reflect reality.

McKenna: People who create are often erased in favor of
corporate statements of authorship, which no one has highlighted—in many
contexts we’re totally willing to have the humans erased. Intangible =
special. Barton Beebe would say: Why is
it that people who put together this computer have no ability to be reflected
in any way? Maybe the TM answer is that
people know their work will be merged into the corporation, but why not the
same thing with ©.

Buccafusco: Hammer and nail: as IP lawyers, when we see
distributional inequalities we look for IP to fix it. But there are other
policies to deal w/distributional issues.

Silbey: interesting feature of contemporary culture that IP
is more a feature of cultural conversation today than 20 years ago. Maybe we
can’t talk about tax politically.

Burk: Labor law is decidedly less part of public discourse.

Silbey: challenge is to frame debate in way that has
political purchase. Everyone can be an author is a very powerful frame.

Suchman: The other thing to remember is that we’re not just
talking about economic redistribution. Dignity, free speech, identity formation—there
may be other bodies of law that go after that too, but it’s harder to say there
are clearer policy levers. Some of these things are distributive in some sense
but very close to IP.

Silbey: you see this a lot in equality debates: does giving
someone more equality give someone less? Not normally, but in IP if it’s framed
as a money transfer then you get that characteristic.

Pedraza-Farina: we stop short of explaining what we mean by “access.”
Meaningful ability to engage w/it and
use it in subsequent acts of creativity/productive recombination. The ability
to do that requires some things outside of IP: labor law, education, knowledge
infrastructures (Frischmann).

Fromer: Fair use can have this sort of effect if it’s
structured right; lack of clarity can be a problem, but it is often trying to
implement redistributive justice, e.g., for education. Productive access can
come by putting things in the right place in the law.

Suchman: Mandatory licensing can also have some of these
effects: owner has no right to exclude, but right to money. Beyond that it’s fair use; then beyond that
it’s public domain; but beyond that it’s public domain with publicly supported
dissemination structures. Policy levers
are inside & outside IP.

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Stanford Sociology & Psychology of IP, branding

Posted on September 10, 2016 by rtushnet

Session 4: The sociology and psychology of brands

Discussion leaders: Jeanne Fromer: A lot of work in this
area. Some is about how consumers react to branding in systematic ways. Rule of thumb in talking to branding folks:
if you pick a word as a brand, it should be 7 letters or less or 2 syllables or
less. More systematic research bears this
out in some ways: recognition/recall is better; to the point that consumers
shorten Chevrolet to Chevy and Coca-Cola to Coke. Unusual spellings can help recall; names that
remind people of other words like Verizon/horizon, Intel/intelligent, Viagra/vigor,
vitality, aggression, Niagara. Arbitrary marks work better when a story can
connect the underlying good/service. There’s no one branding choice thought to
be better than others, but there are costs and benefits. Low-consonant, low-frequency vowel names for
large cars; high-consonant, high vowel frequency brand name for fast cars. Sounds: “ah” like “frosh” sounds creamier than
“frish” for ice cream. American English
doesn’t like “uh”—dull, etc. Perhaps
that’s why “With a name like Smuckers, it’s gotta be good” is the slogan. Blackberry connotes speed, reliability,
accessibility, smallness through “b” sound in part. Strawberry connotes similar
features, but not also relaxation as Blackberry does, and connotes slowness
rather than speed. Some of this is culturally specific, but some is not.
Animals make certain noses to connote largeness or smallness. High-backed vowels like “e” in flea connote smaller/less
power than “ow” or “oo” throughout cultures.
Choosing words in particular for brands isn’t just choosing an empty
vessel, but already has a lot of meaning associated with it.

Also research well beyond this. People look at product packaging and that
influences how they think about the product itself. If you put logo higher on
the packaging = more favorable attitude if powerfully known brand, but if not
put it lower. Aesthetic packages are preferred
over standardized packages.

Social science literature typically doesn’t relate back to
law; this is mostly marketing w/o thinking about costs of marketing choices
imposed either on consumers or competitors.
(1) TM law allows propertization, in some sense, of marks that might be
more advantageous than others. Our job is to think about costs/spaces where we
might be allowing propertization despite formal doctrine.

Earlier work on creativity and TM law. TM bakes in some
encouragement to choose certain types of marks by making it easier to get more protection
if you choose arbitrary or fanciful marks, which wouldn’t necessarily align
with the marketing literature. Some
would say if you’re successful with arbitrary or fanciful, you’re in the best
possible shape b/c you’ll get the best strength.

Also huge body of work on what confuses consumers.
Endogeneity question: some things may be confusing because we allow them to be
called confusing and then most competitors stop doing that and it gets more
confusing over time. When nonconfusing
as matter of law, people get used to the practice.

Rebecca Tushnet

Jeannie Fromer did the heavy lifting about what has reached
legal academics and sometimes law.
Hidden work that is proprietary.
Tasting the TM in Pepsi/Coke studies.

What we know about brands v. what we know about TMs—Deven Desai
has written about the distinction and the lack thereof that has been part of
the problem. In some ways courts have
created problems by conflating what businesses care about and what marketers
talk about, brands, with what the law historically cared about,
trademarks. Language of psychology is
often thrown around freely, as in the old Mishawaka case where the court talks
about what people have been convinced to think they want, but still endorses TM
owner’s control over that value. TM
information conception is TM as source indication—shortcut from mind to mind—versus
brand: store and producer of social signals, saying something about the
consumer and signalling specific qualities, such that interference w/ those
signals even in the absence of interference w/source signification is a concern
for TM law. I previously wrote about
misuse of psychological evidence in claims to justify dilution law—a cause of
action in search of a theory. Cautionary
tale for © and patent, perhaps—individual points are picked up by advocates and
arguably misused.

If the story of © is, in large part, it’s not as important
as you think, that may also be the story of TM where confusion claims are
likely overstated, and harm from confusion is also probably overstated. However, hope that we can get more consensus
by going to empirical claims is probably futile, as Dan Kahan et al have said
in many other legal contexts. Our morals
are determining our reaction to empirical claims.

Skeptic about TMs as a reward for creativity except in the
very broad and perhaps unhelpful definition if anything successful is an
innovation, then yes, TMs do in some sense reward innovation. But brands generally trade on images related
to things that are already popular: luxury, speed, cool. Strategies for becoming well known exist,
though you can’t necessarily predict which ones will succeed—audience is a lot
of the contribution to that. Skeptical in
part b/c I was thinking about the European approach of TM as “incentive”:
counting SKUs, correlating # of TM registrations with market success as
evidence of successful incentive; seems to me to be a fundamental
misunderstanding of causation and/or a failure to define terms.

Finally, and perhaps relatedly: sociology of registration:
written about differences b/t registration and infringement regimes. Could supplement by doing more empirical work
with examiners and registration attorneys: what do they think they’re doing?

Commentators: Madhavi Sunder: We’ve talked mostly about pro producers.
Luxury brands offer the opportunity to talk about users, consumers, buyers, and
the work they do. Signal distinction of
buyer, communities to which she belongs, her personal identity. Barton Beebe has discussed what TM owners do
to keep consumers in their place, but it’s very hard to keep them there. Consumers appropriate & perform luxury
brands in unique/unexpected ways: $2000 boots combined w/a thrift store outfit.
“Individual consumers create their own stories and they stretch their budgets”—excellent
new book on Luxury
Economy and IP edited by Sunder
& Haochen Sun (in which I also have a chapter). Also Lemley & Dogan, Sonia Katyal. Brands
are selling community, but they are creative products of consumers just as much
as they are of corporations. Where is
the creativity in TM and branding? Is TM
creative in the literary sense or more in the patent sense of innovation based
on/moved by science? Branding as science
from producer perspective, but more akin to literary creations given how
consumers use them—they’re stories/performances coauthored by owner &
consumer.

Sci & tech studies: the way these objects move our world
for better or worse: Marlboro man has blood on his hands. Apple’s “rip, mix, burn” helps us understand
our own powers and perhaps our limitations. Native Americans internalize the
slur “Redskins.” But now we see Asian-American ban seeking to register “Slants”
to take back the slur. Brands don’t distinguish products, they distinguish
people, as in Rochelle Dreyfuss’ 1990 article—the lingua franca of our culture.

Yesterday’s discussion of patent as brand: Today they’re not
market driven but marketing driven—looking good, not doing good—image over ego
incentivizes us to act. Not about how inventive your company is, but how
inventive people think your company is.

Companies like Samsung are remaking themselves to focus less
on tech breakthroughs and more about aesthetic allure of products and company
as a whole. Turn to sensation has paid off—social and emotional connections w/
customers. Apple became most valuable
company not by creating products that are tech breakthroughs but rather by
creating products w/standout design. On
design patents: can have doctrinal payoff as we think about turn to design
patents and their desperate need for reform.
Iconic design as melding simplicity, utility, ease of mass
production. “Wicked problem” of design
thinking is insistence on lack of rigid boundaries b/t industrial engineering,
marketing, design—that can actually help us approach design patents doctrinally
differently. TM and © try to push
functional aspects outside protection; skeptical eye towards hybrids in
functionality/creativity should lead us to be more skeptical in design patent
as well.

Mark McKenna: Research in this area is about brands and not
TMs, and those aren’t the same. They’re not asking the same questions we
are. There is a line of literature that’s
about confusion, but if you read those studies, they’re actually about
association—whether consumers link one thing to another thing. They’re not
about source confusion. There’s often an agenda in those articles to redefine
the legal terms to match the marketing terms, and that’s important to
recognize. One reason that diving into
this literature is important: if you read it through the lens of the doctrine,
you think it’s not about the right questions. If you read doctrine through the
lens of these studies, modern TM law makes a lot more sense descriptively.
Plaintiffs use the tools they have to do what they want.

Where the literature is: the two deepest areas are done by
social psychologists and marketing dep’ts; they are similar but don’t talk to
each other, don’t cite each other, don’t publish in the same journals. These
are primarily about the ways consumers react to various branding strategies:
brand extensions, development techniques; studies are done for managerial
purpose. Consumers’ interaction w/favorite brands resembles their interaction
w/religious icons. fMRI research shows
similar brain activation. [But cf.
doubts about fMRI research.] Opportunity
for researching how people form communities; they form around brands, as
anthropologists like Rosemary Coombe understand.

Holistic branding: a lot of ads for tobacco got banned in
Europe; Marlboro started paying bar owners to use the color red and a Western
motif b/c they had pretty good evidence that reminded people of the Marlboro
man.

Literature suggests at consumers rarely draw bad conclusions
about the original goods from thinking goods are associated, unless the goods
are highly related. But the literature
does show some kind of “harm”—the impact on future brand development/narrative
of the brand. More about market preemption or derivative work rights. Also interesting work on interference
w/decisionmaking, including the problem of over-choice in the market. Notable
how little of that is about TM; if we were serious about reducing search costs,
TM is a terrible tool. In some cases the
research suggests that some of the things we incentivize/protect through IP
contribute to the problem of over-choice—attempts to differentiate in the
market based on fashion/similar motives. Adding additional layers of IP may
make that problem worse. [This is an
example of “good from individual company perspective, bad for social welfare”—differentiation
from other products in the same category across multiple features may make it
harder for consumers to compare and to make decisions, but that can be a
private benefit if it means they stick to you.]

What research we don’t have: not very much about the way
companies think about TM as legal entities as compared to other kinds of
IP. “Why do companies patent” v. “why do
companies create patentable subject matter”?
Why do companies choose TM/branding instead of other strategies? The
research is so heavily about consumer reaction.
Proprietary research might be one of those places.

Mark Lemley: Role of functionality in TM law—maybe we should
be defining many many more aspects of a brand as functional than we are. If
not, maybe there’s something wrong w/our current idea of functionality and we
need to accept our protection of things w/functional characteristics and give
up on the idea of excluding functions.
Another thought: perhaps we ought to be very skeptical of the idea of
inherent distinctiveness. Just as we decided not to assume anything is
inherently distinctive in product design, maybe we should do that for word
marks as well if there is a bunch of subliminal signaling drawing people in
that isn’t related in the first instance to that source until secondary meaning
develops.

RT’s claim that empirical evidence gets ignored and filtered
through morality: most profoundly depressing thing he’s heard in 2016, the year
of Trump [and profoundly related to that!]. Resists the notion it’s true,
shouldn’t we give up the game? Moral argument won’t be related to good policy
outcomes. [I don’t think that’s
inevitable—Wal-Mart is a case packed with
statements that have the form of factual claims, but what’s driving it is a
commitment about competition. Facts are important because we shouldn’t be wrong, but we have to do the moral
argument coextensive with that.]

Rob MacCoun: Lots of psych research is associational in
nature: exposed to X, think about Y.
Bear in mind these associations are asymmetrical. A evokes B does not
tell you how well B evokes A. [I wrote
about this in Gone in 60 Milliseconds
too.] RT’s work: if you get into a cab
in NYC, “Kennedy” is not ambiguous despite the existence of Differ w/RT b/c
there is dilution if you’re not in the context of being in a cab, every new “Kennedy”
object you encounter makes you less likely to think of the airport. [My point
is that mostly we do have the context.] Psych is a catalog of phenomena, not a
grand theory. You shouldn’t start w/any
one and build a theory of TM or patent from it. Psychologists are just as
guilty of that—we think we see immediate relevance but it can be misleading b/c
of all the other things that impact these issues. Design studies specifically
to answer TM questions.

McKenna: Q is whether empirical claims are really driving
the bus here. TM is shot through w/claims that it’s building a world based on
how consumers really behave, but that’s not true. What MacCoun counsels against
is exactly what TM does. We’re making lots of choices about when we care about
the empirical facts, and when certain facts should override others. Behoove us
to be clear about when we’re normative and when we’re empirical. Wal-Mart
and Dastar intermingle—tendency to
make normative arguments in empirical-sounding terms.

Jessica Silbey: reproductive choice/Carhart—same thing, Justice Kennedy picked an empirical claim about
how women may regret abortion. That was from
a social movement around abortion. Then social movement countered it, creating
empirical studies/recording of facts rejecting that statement and the meaning
behind the statement. Now, you get a total reversal in the SCt about the “regret”
narrative and the role of law in changing whether “regret” happens. What would
that look like in TM. If the issue is
the normative environment, what would a movement look like to capture the
freedom of expression or competition?

Emotional attachment people have to marks as names. My
research suggests people talk about brands as their “babies.” When the fight becomes about one’s emotional
relationship to one’s company’s name rather than consumer confusion; those
cases are deeply unsolvable. Becomes a
crapshoot. In other areas like family
law or defamation, the courts are willing to say, I know you’re hurt, but too
bad. Why are they not willing to do that
in a TM case?

Sprigman: Maybe they will do that in dilution, in the 1A
context.

Irreducible minimum of confusion as a key concept. When I try to explain how much confusion is necessary
for liability, students ask whether they’re confused or just making
associations b/c people have a rage to make associations. 80% of people aren’t confused. If we disallow the D from using it’s mark, we
may right a certain percentage of confusion, but in the process we deprive a
bunch of other people of a tool they’ve learned how to use, including the
associations they’ve made w/the D’s mark.
Built in to TM law must be the idea that this isn’t a big deal, this
content is readily replaceable and consumers will heal. What Fromer said
suggests that this won’t be the case always; the second best may be quite a bit
worse in some product categories. Consumers won’t heal fully. If that’s the case, implication is that if we
believe the linguistic story about how some marks are more appropriate to some
product categories than other marks, we have to do both sides of the equation.

Lemley: one area where we do this, for precisely this
reason, is genericide.

Andrew Torrance: Trade secrets (Coca-Cola, KFC) being used
as TM; © used as patent for software; TM used as patents (Traffix); patents
used as © in the design patent context. Bleeding of rights into rights. Porous
boundaries.

Fromer: Unclear what we mean by “distinctiveness.” Indicative of source? That’s just indicating an association, but if
we care about certain costs, that might not be enough. Another way to think about it: what
associations does it trigger in people’s brains? If it lights up a lot of
connections w/the underlying product/service, maybe we should worry about
giving exclusive rights in that claimed mark.
The less it’s associated w/other things, the less we might want to care
about granting rights. Current categories aren’t fine-grained enough to deal
with that. Psycho-linguistic literature might be helpful here.

Sunder: Heightened standard for product design; two
functionality doctrines; idea that labeling products can avoid confusion—TM and
trade dress doctrine can be powerful tools if used properly. Design patent is where companies w/broad
conception of “brand” are turning there b/c there isn’t a functionality
constraint in any real sense. Design
patent can cover ease of use. We should expand our conversation to design
patent. [Though the problem is that no
principle of psychology or sociology presently would limit design patent
rights, precisely b/c the doctrine says that functionality in the TM sense
doesn’t matter.]

Lisa Ouellette: Linguistic functionality. Matter of degree: Viagra is better than
control over “erectile dysfunction”—we shouldn’t get rid of tools pushing
companies towards one end of the spectrum.

Pedraza-Farina: There is research on brand communities, in
terms of McKenna’s point. An interesting
way to think about them. Are those of
particular concern? Maybe they have
ability to manipulate the brand, maybe they are the ones who could be affected
by dilution (or couldn’t be).

McKenna: Stimulus generalization isn’t limited to
words. Many marketing folks have been
trying to count stimulus generalization as confusion. Study about whether
people generalize from product packaging characteristics, stripped of any TMs:
clear plastic in a particular shape. The
kinds of things that consumers thought when they saw another package of candy
in the same sort of package: oh, that’s also refreshing and minty; chewy like
gum; taste good—they generalize all sorts of product attributes based on
packaging. If we question this about
words, this is a generalizable problem through TM.

In thinking about number confused, consider longstanding
debate around whether TM is for protecting consumers or not. Courts have internalized harm to consumer
idea—even 20% confusion is harm to that particular consumer. Difficult to hang on to notion of consumer
focus if we continue on this road, esp. with addition of design patent. More
focus on using these things as interchangeable IP tools=less focus on consumer.

David Fagundes: Managing TMs to avoid associations w/outlier
communities: Harley-Davidson was anxious about associations w/retirees—took away
the edge. Plausible that brands are managed to avoid certain communities, but
not necessarily as you think.

Mark Suchman: though the politics of overtly opposing that
would be just as bad as for opposing other groups.

Dan Burk: Traditional knowledge/preserving traditional
community; fan communities that coalesce around copyrighted properties;
knowledge communities in patent. There
may be something there—do we want the TM owner to be a kind of fiduciary and have
obligations to preserve that group?

Stephanie Bair: interested in the ability and conscious
effort by brands and branders to bypass conscious rational decisionmaking and
evoke these visceral responses. Tension b/t that and traditional efficiency
rationales of reducing search costs and trying to get brand owners to invest in
quality products.

McKenna: so much depends on what you identify as
characteristics of the product. Laura Bradford has
nice paper on emotional valence of brands. Should we differentiate that
from other characteristics of the brand?

MacCoun: lots of research on subliminal advertising. We know
that it’s real but ephemeral. Dominant
theory of persuasion is elaboration model that distinguishes b/t peripheral
cues and central route to persuasion. Those unconscious associations are easy
to create and also easy to knock out by the competitor—only good until the next
unconscious source comes along with its own cue.

McKenna: not so much unconscious as emotional appeal/System
2.

Tim Holbrook: who controls the market? Inclusion and exclusion: using the power of
the state to do that. That broader context gives a different angle on the
problem.

Burk: If we’re protecting visceral/emotional reactions in
TM, there’s a strong strain of 1A cases saying the 1A is about deliberate,
thoughtful, rational reactions. My sense is that one of the friction points in
the law is TM and the 1A. Something interesting there about state intervention
into expression. If one is really about visceral reactions, what relation to 1A
values?

Sunder: Lemley & Sprigman are writing about
functionality screens. Science of TMs: one question is that we could push
towards calling everything functional—there’s a science to how we read the red
colored sole. Couldn’t we take that into © as well?

Lemley: branding claims: not just a move away from
consumers, but a move away from unfair competition: more property, “if value
then right” approach. He’s skeptical of
that move; not clear to him that it’s socially desirable thing for gov’t
intervention to encourage. Morally neutral (v. inventions, expression). Also
not clear we need legal incentive given other incentives to engage in this type
of branding. To the extent it’s valuable to encourage a religious-like reaction
in people, perhaps making them happier, that is collaborative and not
unidirectional. A law facilitating that still shouldn’t be “I made it and I own
it” even to the extent that © and patent are b/c that value is collaboratively
created. People feel proprietary interest in a brand they’ve helped to create.
Readers do also connect to books, but even more true in TM.

McKenna: One immediate difficulty in imagining a world that
only protects rational decisionmaking is that literature demonstrates it’s
impossible to disentangle. The nonrational stuff conveys info about tangible
product characteristics in interesting ways. Lemley’s point: you might
recognize that it’s fine for you to build that with consumers. That isn’t
deceptive and can’t be separated from other stuff. But we should recognize the
same when other people use the mark nondeceptively. The state wouldn’t get involved w/o
deception; if we allow TM owner to create meaning, everyone else should be
allowed to do so too. TM’s got a bunch
better at this in the 1A context over the past decade.

Silbey: people talk about how many TM registrations they’ve
collected w/pride. They say collection
is important for the business model: TM was the most valuable asset. Can correlate value to number and breadth of
marks. Hard to square w/doctrine of TMs
as distinct signifiers. Courts say there
are lots of options, but TM owners feel special connection w/theirs. TM as limitless v. TMs in practice has a
social life/actual practice of collecting marks.

McKenna: Stacey Dogan argues that we need competing
counternarratives about the harms of protection—speech, competition. It won’t
be enough to say “you’re making these rights too broad.” That maps pretty well
descriptively to the places where TM has swung back in the past few decades—increasing
bite of functionality, Wal-Mart. Other things courts seem to get is boundary
questions—when this starts to look like ©, that bothers them; they want to say
there’s a reason for having different IP regimes.

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Sociology and Psychology of IP, Session 3: What can we learn from IP-free zones?

Posted on September 10, 2016 by rtushnet

Discussion leaders: Kate Darling: attribution as something
that people want rather than money in “negative spaces.” They know they can
monetize their reputations. Systems of
self-governance often differ from those of formal law.

Attribution preference is not just about fairness/ego. We
also see in comparatively rational actor commercial setting that attribution
has a lot of value. It’s not just social
norms; market mechanisms/responses as in fashion, cocktails, Nollywood,
porn. In porn specifically, my work indicates
that companies create info goods, but create a secondary market they can profit
from. They link the two through branding.
Similar to other ways of monetizing reputation.

Flexibility of self-regulation: Norm systems get criticized
a bunch, but beautifully efficient at adapting.
Fagundes’ follow-up to study on roller derby names—social norms changed
over four years since the original study.
You interpreted this as a breakdown, but I’m not sure this was a market
failure from an IP perspective. People were surprisingly willing to just
completely overhaul the social norms of what’s fair in a very short time
period. Very powerful illustration of adaptability
of norm systems to what’s best for the community.

Dave Fagundes: (1) IP unavailable: recipies. (2) Apparatus of enforcing IP may be
available in theory but not in practice.
(3) May be practically available but unused b/c it doesn’t give people
what they want. (1) and (3) sound
different but arise for the same reasons/desires.

Hard to disentangle social norms (altruism) from market
norms (complete self-interest). Leave a restaurant w/o paying = arrested. Leave a dinner party w/ paying = rude! Which of these dominates in IP free
zones? Usually we think it’s noneconomic
social norms—tattoo artists, chefs, etc. find people using creative production
w/o permission, act as if honor is offended. But that’s not to him obviously
the answer b/c in many instances their creative production is tied up
w/livelihood: defending professional turf of comedy, fashion, etc.

These systems track poorly onto the term “IP.” Most of the systems he considered are closer
to TM/brand management. In many of these
settings, including magic tricks, the systems are motivated by a desire to
protect creative work and to preserve
a brand, intersecting TM/©. Thinks it’s
puzzling that invention seems absent—domain of patent doesn’t seem represented
in the IP-free systems he’s looked at.
[Eric von Hippel’s work?] IP
systems are very hostile to formal legal enforcement. If you threaten legal
action, you lose the sympathy you usually get when you are copied. True in Order
w/o Law, too. In some of these
subcultures, people claim coolness and lawyers are not cool; you should take
care of things w/in community. Or people
think the stakes are too low: disproportionality. But that’s only true where it’s
a real extracurricular.

Norms are difficult to scale. Law scales by using the state; IP-free
systems scale in 2 ways: (1) keeping things really simple, like “don’t copy w/o
attribution” or “don’t copy.” Or (2)
norm entrepreneur or norm yeoman, doing hard work of administration that
manages a registry. Derby is his only example. These are fragile. The second
somebody decides they don’t want to do this for free, it can fall apart.

Not really in the shadow of law. They operate largely
independently of law. You can TM a derby name, but this is ignored. Consistent
w/Ellickson’s thesis that legal centralism is wrong. But most people think they’re
consistent w/law. People in derby would tell him “of course my [derby] name is
copyrighted,” and he’d sometimes suggest they were wrong and they’d reply, “I
think I know about my own name.”

These systems are driven largely by moral intuitions. First in time = first in right; don’t steal
my stuff; give attribution. The factors
they use in determining similarity in derby names look a lot like Polaroid
factors, even though no conscious attempt to imitate law.

W/exception of central organizing structure, how do we know
they’re systems at all? If driven by moral intuitions, why isn’t it just
similar behavior cropping up in similar circumstances. Variation: maybe this is
the development of a system that reinforces behavior consistent w/our moral
intuitions.

[Now I really want to think about norm violators v. norm
entrepreneurs.]

Commentators: Andrew Torrance: overgrazing leads to
ostracization—there’s a dark side to IP-free zones. At least IP has defined
penalties; in the Wild West you’re not sure what they will be. Anything that
can be done in secret is potentially IP-free: people and companies do a lot in
secret. Especially processes that lead
to information. Things done in other
countries. Law has been lurching to
freeing up vast areas of IP (patent)—methods, diagnoses, software. Industry recognizes there’s more freedom now
to do stuff w/o worrying about being prosecuted.

Biotech: certain things ought to be patentable that aren’t,
such as products of human physiology.
PTO will give you a patent on that, but they almost never win—doesn’t
know of a single case where the patent has been enforced when the process takes
place in the human body. There’s no doctrinal reason, but repugnance might explain
it. Human embryonic stem cells, same thing.
Section 33 of AIA: formalizes Weldon Amendment, don’t allow patenting of
anything connected to the human body: no claim may be directed to or
encompassing a human organism. People hadn’t been patenting in that area
typically; maybe that wasn’t commercially valuable or it was repugnant, but now
it’s formally an IP free zone. It’s a natural experiment.

Jim Bessen: Software: rewriting code—you don’t pay attention
to IP where you’re starting from the position of not knowing ultimate value, at
least in a context where software is trade secret in fact, not shared on discs.
Most software is not prepackaged; most either contract programming or
self-development by companies. Great deal of need for tailored, customized
software responding to idiosyncratic needs. That’s a problem for/reason why IP
is practically not important for a programmer in active development. FOSS: not entirely IP-free, in that it relies
on © and contracts, but there’s a large literature on why people do it. Sometimes
it’s reputational, learning, job-seeking.
But also needs: modular software/APIs.
Non-IP activities taking place even though there are also areas where IP
is critical. Law needs to incorporate policies to balance these issues.

Aaron Perzanowski: Did we need a unifying theory of case
studies for our book on IP-negative spaces, or do we need to provide policy
implications? We didn’t think our work needed that at this stage. We have 20-25 different case studies to point
to in this space, and there are certainly trends that emerge, such as
attribution. But so far what he sees is
communities that have more differences than similarities. What kind of creativity does a community
value? What does a community care about in addition to/instead of creativity?
Who counts as a creator? What counts as creativity? [What about the possibility of “family
resemblances” in the category theory/Wittgensteinian sense?] What are their histories, how do they change
over time, and in response to what? When
you see the range, there’s value in doing more of this work, in part because
maybe it builds to some bigger theory and maybe some policy recommendations,
but these projects also have value in themselves. We need people to do more of this work.

Where do otherwise stable norm systems break down? Where are
there points of tension? Sometimes it’s commercial/noncommercial. Sometimes it’s
insiders/outsiders. We’ve seen some relatively
high profile litigation in the graffiti world and the tattoo world. These are
really rare, but when they happen, they get attention. Has concerns about what
happens when law enters the picture for groups that have been blissfully
unaware of/uninterested in the law. Law creates categories/changes the way
people think.

Abishek Nagaraj: Good job of studying IP free zones v.
struggles. IP free zones are not only
for weirdos. 150 years ago, the globe
was an IP free zone. Petra Moser has studied actual physical inventions as
outcomes, not patents. She shows that
levels of innovation weren’t affected that much, but the direction of
innovation was. Tech itself may allow for secrecy—chemicals that are hard to
reverse engineer v. machines that are easy.
IP-free zones lead to tech that encodes secrecy.

Another promising area: open source, digital
innovation. Mostly b/c of the way that
computers work. Get to track over time
how activities are happening. Free
inbuilt measurement and logging devices of great help to researchers.

Having said that, there are lots of contexts where it is
really hard. Chefs, tattoo artists.
Harder when we don’t have IP-full and IP-free subzones, so we can’t
compare easily; also the cultural products aren’t centrally organized—hard to
figure out what’s going on without painstaking interview/ethnographic work.

Lemley: It is interesting to think about the fact that these
cultures do seem to have been put in a marginalized category. Which comes
first? Is this not IP b/c we think it’s
not important, or not important b/c it’s not an IP space? Depending on how we think about this, there
are a bunch of things that fit in here that we don’t think of as insular
communities—an atom that’s mostly empty space, as Andrew Torrance says. One key
issue is whether we include trade secrets in the category “IP,” b/c a lot of
valuable economic activity thrives in part b/c of secrecy. It may well be that it’s really a social norm
doing most of the work, with a legal backstop the same way there’s a legal
backstop for tattoo artists. Financial industry, until quite recently, fit into
this model, and even then, everyone in the financial industry hates patents.

Ways in which we create IP free zones by backing off the
scope of patentable subject matter. Suggests possibilities for research that
don’t raise Nagaraj’s problems. We can observe an exogenous legal shock to the
system and see what happens to market structure, investment, creativity to the
extent that it can be measured by something other than patents (which we should
be doing anyway).

Sprigman: Label we’re applying: No-IP zones isn’t right for
most of them. They fall into a variety of categories. We called it negative space b/c we didn’t
want to lay down a rule about how much IP ought to be present. Fashion is not no-IP, but rather one
potentially very important form of IP—©—wasn’t there, though TM was. This is
often true. It’s important to understanding what the scholarship’s about, b/c though
we can’t give you an answer about what the optimal level is (though neither can
neoclassical economics), it’s very good at giving an answer about what legal,
institutional, and social arrangements lead to innovation. Europe: incredibly
broad sweep of IP rights in fashion. US:
design patents can cover some things at the margins, but practical difficulties
are great for most firms w/o long-lasting things like iconic handbags. Look at
their performance: big growth in NY, eclipsed Paris; but Milan is doing very
well. None of this is about no-IP zone, but it’s higher versus lower. What types of innovation are going on in each
place? Are they sensitive to the differences in IP?

Financial services has a whole branch of innovation in new
financial instruments, where patents and trade secrets are written out b/c you
have to disclose and you have to make a market, which often requires many firms.
Market power takes over from IP, which isn’t a lovely story either. An atomized financial sector might need more
IP to get new financial instruments, which is not a normative claim. People give it a normative cast b/c these are
communities that innovate w/o IP. In
these settings, relatively low levels of IP have led to innovation, and the Q
is in what direction. What you like in
terms of your comedy = what you like in terms of your regulation. It’s entirely
normative.

Buccafusco: We can open up understanding of who’s in the
communities who might matter. It’s not just creators. Who counts as a consumer and understands themself
as part of the community? Consumers
objected to recipe copying; chefs didn’t want public discussion of the matter.

Rob MacCoun: Illegal drug markets—this is an interesting
moment b/c there’s a lot of innovation in marijuana, not just in brands and
strains but other things. Prohibition made it impossible to protect IP; now we’re
seeing the choices they make once law is a (partial) option. Change in players, not just a change in law.
Old hippies who dominated the market are being run out by young MBAs.

Dan Burk: Distinction between common governance spaces and
IP-low/negative spaces. These are two different phenomena which sometimes occur
together. If you’re looking for
variations, make sure to distinguish.
Consider tax advantage patents—prior to State Street they were covered by state secrets; IRS had a rule
that if you had a confidentiality rule in your tax shelter they’d audit it;
then tax patents disappeared when excluded by AIA. Might be another place to
look for exogenous shocks.

Lisa Ouellette: Another distinction: encouragement to
innovators can be through tax credits, grants, etc. not just IP. Benefits of these
studies help us understand how different kinds of economic incentives interact
w/noneconomic incentives.

RT: Norm entrepreneurs v. norm violators: agree w/Aaron
Perzanowski that we need more study of the latter in different contexts, and
not just of P2P filesharers but people who want to push the boundaries of
commercialization—Axanar Star Trek fan
film creators who collected a lot of money in crowdfunding, for example, or
people who set up a Patreon to support their fan art or an Etsy store to sell
their Doctor Who related soap or scarves.
Ongoing norm shifts in terms of “pulling to publish” in largely female fan
communities, or other ways of moving in between fan and professional publishing,
where languages of feminism are often employed in favor of and against various
forms of commercialization.

Institutions in IP free zones: Fagundes talks about derby
and fragility of norm-based governance; can do things to institutionalize
certain norms and engage w/formal law, sometimes to preserve territory:
American Library Association; Electronic Frontier Foundation. Organization for
Transformative Works. OTW: Among other
things, we are an ISP hosting 2 million noncommercial fanworks, over 770,000
registered users and receives over 115 million page views per week. Can’t stop
rogue librarians or rogue fans, whatever that might mean, but can promote
norms, self-understanding (e.g., spread of the language of “transformative work”
in fandom).

Non-IP effects of having an IP-low space. Interesting things happening in fandom around
tagging that intersect w/discourses about feminism, racism, trigger warnings,
and categorization theory/folksonomies.
Terms of service and interface design, for example, contribute to that:
the “Choose Not To Warn” option on a fanwork, which was deliberately designed
in, makes a difference in how people approach warnings. This isn’t directly related to IP, but the freedom
to experiment in content (genre,
length, format) produced by fandom’s emphasis on noncommerciality and fair use may
have made us more attentive to the responsibility of telling people what they’ll
get if they read a particular fanwork.
Wonder what non-IP effects exist of being low-IP in other spaces. [This seems similar to Sprigman’s point that comedy
will be different under different regimes, but it’s not even exactly about the
content that gets produced but about how the content fits into its social
context.]

Peter Lee: Innovation w/o IP, exclusivity w/o IP—those two
things aren’t the same in all cases. Sometimes people aren’t interested in
exclusivity and maybe want attribution.
The potential rub: we think of the public domain as the opposite of
excludability, but some non-IP things are tacit knowledge and inherently
excludable.

Pedraza-Farina: longitudinal studies as really useful.
Social norms as innovation promotion: most case studies have a flavor of “norms
are sufficient, we don’t need IP.” One thing we may be forgetting is the dark
side of social norms. Can be
anti-innovative.

McKenna: Some of this is formal law v. norms, but some is
about directness. Fashion example: there’s tons of TM in the industry. Absence
of © has pushed courts in the direction of creating post-sale confusion. Some other circumstances, it’s not TM
directly but TM/brands serving as adequate economic protection even though not
directly applying to the subject matter.

Silbey: Order w/o Law: the “order” part was really
important. Societies function through
norms. The critical distinction is when you want the features of a legal system
that a norm based system can’t provide: transparency, equal access,
accountability. If we studied the destruction of a system through an
entrepreneur/violator—if the way it’s going is looking more like the virtuous
features of a rule of law system, we might start thinking that certain legal
mechanisms are better at this point than they were before. These norm-based communities are often very
homogeneous. Studies suggest that when
they become large & heterogeneous, the norms break down and the need for
accountability, transparency, and equal access comes in.

Mark Suchman: we tend to call this the study of deviance.
Competence enhancing innovation reinforces the structure—existing customer
bases, distribution channels, etc.; competence destroying innovation makes some
of the things that leading firms are good at no longer relevant. Can imagine
similar things in norm based communities. Interesting to see what they resist as
competence destroying.

Fagundes: one question is why would people create in the
absence of IP; another is why they’d be motivated to create an extra system of
rules when IP already exists. Sometimes it’s when there’s chaos; sometimes when
it’s too expensive; sometimes law doesn’t give them what they want, like
attribution; sometimes law doesn’t cover the subject matter, but he thinks that’s
rare.

Are social norms the ex ante reason people opt in? People are motivated to create; law doesn’t
protect them; they therefore create norms.

These systems don’t have fair use, copyrightability limits
[speak for yourself!]—I’m ultimately agnostic about whether these formal
systems are good. Bottom-up doesn’t mean
best or better.

Sprigman: sometimes tell students that his job is to raise
up a crop of people to protect the strong against the weak. Law has lawyers built into it, which creates
all kinds of access problems. Debate in
fashion: one side observes that there’s no copyright and that means that young
and new designers are disadvantaged by freedom to copy. Other side says that
the industry is open to young and new in part b/c cost of entry doesn’t include
hiring a lawyer. Yes, the weak will sometimes be preyed upon by the strong, but
in a more concentrated industry the weak aren’t going to be there to be preyed
on.

Holbrook: In formal IP we always worry about public notice
and linedrawing; we should think about this here as well. There’s also concern
about enforcement mechanisms, which can be pernicious and harmful. Structure of
community itself screams for concerns about exclusion on grounds we’d find
troubling—think of GamerGate. Norms can be normatively bad.

Bessen: Don’t assume these are small communities; FOSS is
very big. Sophisticated means of managing communities exist.

Lemley: Jennifer Rothman has done interesting work on risks
of custom. We could get a lot by studying what IP regimes people opt out of,
b/c that may tell us if there is too little—or too much—IP in their area.

Paul Goldstein: A world w/o IP would be a world
w/alternative forms of protection, such as contract, trade secret (a
contractual version in some manifestations).
IP might be a default, but Linux/CC uses a space to create w/very
limited protections. Patents used to
forestall the patenting of others.
Realms w/in IP such as fair use, private use, where there is an
unpoliced use. Intrusion of law gets the same kind of attention such as tattoo
artists’ suits, as when ASCAP sues the Girl Scouts for singing songs around the
campfire. Has the US fashion industry
taken advantage of absence of protection here to poach French and German
design? Cross-border traffic may tell us
a lot about creativity inside and outside.

Sunder: think about childhood as an IP-free space;
educational spaces. How do we police overstepping of IP into sacred spaces of
childhood, family? No community/culture
is hermetically sealed; we allow normative policing inside, but when someone
outside the community appropriates we tend to lawyer up. Native American tribes are turning to TM,
copyright, even design patent. IP as
currency of “modernity.”

Buccafusco: Some people thought that these spaces couldn’t
teach us anything about music, film, the art that “matters.” Can we change minds? How?
What are the next generation of projects to convince the unconvinced?

Sprigman: Food and fashion are important forms of creativity. Serious point: germs of more work are there.
Kate Darling writes about online adult entertainment industry, making the point
that response to uncontrolled piracy was to change the product mix to something
that was experience based and more difficult to pirate: rise of camgirls. Music
industry: the rebirth of the live show. Movie industry has reinvested in
theater industry as a consumption good.
Music industry also reinvigorated the singles market, which turns out to
be how consumers want to buy music; subscription model is rising in music and
movies. Enormous diversification of consumption opportunities that was provoked
by piracy, resulting in more people w/different willingness to pay being
served. There’s more to say about that, but these low IP industries did it and
high IP industries can do that too?

Silbey: pushing back on data that’s being created by
consumption patterns that’s not accessible to us: Amazon, Netflix, Spotify—that
could help us understand what’s being created, why and how.

Fagundes: 10-15 years, skepticism has emerged about core
innovation quid pro quo story. This is a huge piece of that skepticism: if
there are 7 different places where there’s innovation w/o IP, that’s part of
showing that the canonical story has huge holes. [“I refute it thus!”]

Goldstein: “Copyright industries” will respond by calling
these all marginal activities. What they
have less success brushing off is the observation about the changes in
mainstream industries—music, film, publishing to a lesser extent. They don’t want to talk about that. Kastenmeier said: going forward, when anyone
comes to this subcommittee and asks for an extension in IP, they have to do
something equivalent to an environmental impact statement saying that the
industry needs the right given to continue producing/produce at a higher level.
First hearings after that—semiconductor proposal—was strained effort to explain
need for incentives. Not a single hearing after that addressed the issue. You
can’t do business in DC in those terms w/IP, b/c the basic premise that you
need exclusive rights to generate creativity was an unmanageable task. So we
have interesting studies about “marginal” creative activities; huge shifts in
mainstream media; fascinating to see attempt to map current trends onto what
copyright law specifies as conditions for protection. There will be increasing
mismatch b/t what law needs to do and what industry is going off to do on its
own. [DRM?] Taking “marginal” methodologies and applying
them to the mainstream would provide interesting results.

Lemley: Thank god for semiconductor protection! Imagine what
the industry would have looked like w/o that act.

Goldstein: only 2 cases b/c the law is working so well
[everyone laughs]

Silbey: Major industries don’t give us access. It was a major enterprise to get embedded in
Hollywood. Pharmacos are notoriously secretive. Music is easier, but many of us
would love to do that if we could. Confidential
interviews—but that’s subject to criticism for lack of transparency.

RT: The industries do talk about this: they talk about the “value
gap.”

Sprigman: The studies say that we have equilibria, not an
optimum, and these equilibria, even if fragile, seem to be consistent w/lots of
innovation. There’s tons of stuff produced in fashion. That’s correlated w/ a
rights-free environment (at the core).
Protection’s not as complete as it was in music either—the question is
what’s the set of protections necessary to have a robust, innovative
community. If that’s the question, the
industry has to explain why what we see represents underinvestment. [But they
say it represents underreward.] We have
high quality and high output in music; need to explain why this “Silver Age”
looks bad.

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Sociology and Psychology of IP, Session 3: What can we learn from IP-free zones?

Posted on September 10, 2016 by rtushnet

[Now I really want to think about norm violators v. norm
entrepreneurs.]

Are social norms the ex ante reason people opt in? People are motivated to create; law doesn’t
protect them; they therefore create norms.

These systems don’t have fair use, copyrightability limits
[speak for yourself!]—I’m ultimately agnostic about whether these formal
systems are good. Bottom-up doesn’t mean
best or better.

Bessen: Don’t assume these are small communities; FOSS is
very big. Sophisticated means of managing communities exist.

Lemley: Thank god for semiconductor protection! Imagine what
the industry would have looked like w/o that act.

Goldstein: only 2 cases b/c the law is working so well
[everyone laughs]

RT: The industries do talk about this: they talk about the “value
gap.”

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The Psychology and Sociology of IP, patents

Posted on September 9, 2016 by rtushnet

Session 2: Why do companies patent?

Discussion leaders: Lisa Ouellette: Accounts indicate that
non-incentive reasons drive much patenting, contrary to standard incentive
story. What do sociologists etc. think
about this divide in accounts?
Sociology/psychology give us tools when economic rationality (or what
the economists say rationality is) falls short.
How do those fields feel about our cooptation, mostly from a law &
econ perspective?

Economic rationality of individual firm choice is different
from whether patenting is utility- or welfare-maximizing. Evidence of whether
they’re needed for commercialization is shaky, but that’s different from the
question of why firms patent.

Burk on sociology of patenting: he says it’s irrational b/c
most patents are unenforced unlicensed and ignored. [Quoting Lemley saying that, Burk points
out.] But that’s like saying buying
options is irrational b/c most options don’t pan out. The total rents from
patents are larger than the total costs; similarly true for university patent
licensing income v. costs overall, even w/a lot of losers.

Dan Burk: most of our discussion is oriented to individuals
b/c at the end of the day it’s natural people who invent things, as patent
though not © recognizes. At the same time, we know this happens in
organizational contexts. Interested in
how often the phrase “tell a story” came up.
There are certain themes, narratives, stories that lend
cohesion/coherence to social activities—trying to expand the stories beyond
economic ones that are common in our field.

Concepts of efficiency and welfare and preferences are
socially constructed—economics doesn’t talk about how preferences are
constructed or where they come from, and that is exactly what we are concerned
with. Small level differences in
reactions—Brownian motion—engineers and managers may have different reactions
to changes. Network models are another
approach. Theory of the firm appears
outdated to many sociologists; networks instead. Formal legal structure of the firm
may not be relevant. Some organizations are within, others outside the firm. We have surveys (which may be
methodologically flawed by others’ standards), but we don’t have fieldwork
where you embed over months/years. What people tell you they do and what they
do may not be the same. How do we add that to the kit? Sociologist may spend 7 years studying chefs,
but most of us don’t have the training to know what to do and tenure etc. norms
mean that we can’t do that and hope to thrive in our careers.

Commentators: Tim Holbrook: Race/gender play big roles. W/in the institutions, patents are currency: example,
wall of names at business showing who had patents—didn’t care what the patent
was for or how much money it made to get on the wall. Externally it may not look rational but has
internal productivity payoff. Norm-setting in institutions. Patents may also have more salience in
helping develop brands, goodwill in today’s society. Global question: clearly empirical evidence
suggests that patents don’t operate in the traditional ways to incentivize
invention. Has that always been true?

Peter Lee: Economic reasons for patenting: can be socially
rational to follow myths, and even economically rational: if you don’t follow
these myths, market may punish you.
Irrational exuberance of markets; shareholders have certain expectations
for what companies do and reward/punish. Narrative of patenting as semantically
equivalent to patenting is important—if used as innovation proxy, may be
misleading. Smaller companies and larger
may differ in reasons: need to accumulate capital/send signals may be more
important for smaller. Smaller cos.
often tend to be more innovative; patent or perish may be the dynamic. Stage of
company also matters. 20 inventers at
MakerFair: those who just started out, excited about idea, didn’t know/care
much about patents/IP. More sophisticated entrepeneurs, those seeking
financing, claimed savvy/ were seeking patent protection.

Different types of companies, here including universities.
Sociological evolution of university from anti-commercial to remarkable shift
to seeing patents as part of own institutional mission. Scientists encourage tech transfer offices to
patent, seek out licensees, go to work for them.

Lemley: Patent wall is important—you see it for individuals,
at companies, in marketing literature—people value it in some way. Do they value it in a way IP law ought to
care about? Holbrook called it an
incentive to generate ideas, and that might be true, but it’s also possible
that it’s an incentive to turn uncodified knowledge you’d have anyway over to
the patent office, with unclear social benefits/costs. Maybe it’s just
triggering the segmenting of things that otherwise wouldn’t have been worth
patenting or would otherwise have been put together into one large entity,
which could be a bad thing for society.
A lot of what we want here is a metric for innovation and we suck at
measuring it. The number of economists who make careers by using patent counts
as a proxy for innovation suggests that this is really a usable metric even by
people who are fairly sophisticated and probably ought to know better. The
desire for such a metric by scholars and companies may be driving us to
valorize patents.

Patents are also a trading card. They are our tulips. Allow
us to structure a market for something difficult, which is know how. The patent is carrying with it the knowledge/know-how
that allows companies to work together. That could be extremely valuable, but
he then wonders what the law ought to be doing.

Silbey: Patents as brands/signalling devices, and that’s
absolutely one way patents function. Patents
as cultural objects whose meaning has shifted over time; we need to map that
shift in function as semiotic object. That will help us understand what rights
we want to confer. Inevitably, you
interview different people in companies w/different perspectives and goals: you
find tensions and commonalities w/in the institution. Easier to think about how
the companies use patents as a sign of why they might be collecting them. Andrew Currah, J. Econ. Geog., on how
Hollywood collects © as a signal about what it is. A model for studying institutional
motivations for IP.

Buccafusco: Ask why don’t firms patent, or what firms do
instead of patenting, as well. Should we assume patentable inventions? There’s
stuff that matters that isn’t patentable.

Jim Bessen: Economists model innovation, not
inventions. This leads to problems
talking to you guys. Value of patents,
estimating: one method is looking at whether they’re willing to pay the renewal
fee, assuming they’re rational about that. We don’t care about the source of
that value. Value of patents is
relatively small part of value of innovation.
Knowledge development happens in lots of ways. Value of patents resides
largely in small number of most valuable patents. Legal system is looking at the tip of the
iceberg that is a tip of another iceberg, and that’s where the money is, but we
have to think more broadly.

Dan Burk: We’ve been using incentive as shorthand for “incentive
to invest in economically rational way,” but social science will always talk
about motivation, not just return on investment but other motivations. Note that suffragettes used patenting as
evidence that women should have the vote—they set up a booth at the World’s
Fair. May not have anything to do w/rationality and incentives in the usual
sense, but still a motivation.

Jeanne Fromer: Women and patenting: the way that work is
assigned in companies may mean women get things that are harder to patent. It’s
not the Q why companies patent, but how companies are organized and how we
assign work to people. Women who can’t get
patents are not going up on that wall of praise.

McKenna: note also the me-tooism. Universities patent b/c it’s the way to be a
serious research university these days, although they are also delusional about
how much it’s likely to pay off. But mostly it’s a signal about seriousness
rather than a rational strategy to pay off through licensing. Also part of a larger shift about how we
think about and fund universities, driven by trustees who think universities
should be a business.

Rob MacCoun: Interesting shift from morning’s focus on
images/accounts of human nature to domain in which economics is a variable.

[sorry, dazed from lack of sleep]

Silbey: myth of self-interest. Companies want to survive,
but what does it mean to survive? Lots of startups, their goal is to be
acquired. University’s definition: survival depends on reputational cachet.
Self-interest variable needs to be better delineated to understand how patents
function. EpiPen: learning from profound
failures in innovations in the patent space—why we don’t have a competitive
market in the EpiPen and the role of patents in that failure—is a rich space
for study.

Sprigman: Signals and marketing tools: there are always
other ways to send a signal. When we can’t compete on houses we compete on the
schools we send our kids to. The question is the relevant costs and benefits of
having these particular signals, if that’s what patents are doing.

Bessen: The value of a signal is related to the value of the
cost of giving the signal, and literature on startups suggests that patents may
not be that valuable.

Sprigman: law & econ: total social welfare criterion. In
business school, they talk about producerist welfare. It might be startups are getting funded b/c
of patents, but maybe they’re crappy and social welfare does down. Second-best for producers might be first-best
for society, even if VCs have to do work and live with people and figure out
what they’re doing, instead of giving Elizabeth Holmes a billion dollars for
Theranos.

Burk: different kinds of signaling: firm value, managerial
competence. At other times, we talk about signaling legitimacy, social players,
American innovativeness, etc. These
might overlap but don’t always. Women
scientists patent at a lower rate than male counterparts; why? Ethnography:
women are socialized not to think in these terms. When a male engineer comes up
with something, he’s happy and thinks he might be able to make money. A woman in the same situation will be happy
but is less likely to think that she should get out and pitch it; more likely
to be excluded from advisory boards, committees, etc. where she might make
contacts to use the patent to commercialize. Even if you think patents are
traditional econ incentive, it’s swamped by other social structures/signals
that are preventing what we want to happen from happening. There’s virtually no
evidence on race. One piece of work: Af-Am
inventors used to patent at about the same rate as the general population;
dropped significantly in the 20^th century due to a series of
lynchings.

Nagaraj: New study tracking HS students in NY, and there are
some differences by race, holding ability constant, in whether they end up in
patent literature.

Sunder: design patent turn—it’s about your image as an
innovator. It’s less about utility and more about creating new experiences and
lifestyles and image. Shaky theoretical
foundations for design patent; this conversation is making me more nostalgic
for utility patents where we focused on the quid pro quo and whether the
benefit outweighed the cost. Design
patent calculus is much harder to cabin.

Stephanie Bair: Our ability as humans to rationalize:
split-brain patients make up reasons for what they do that don’t track what
actually happened. Same thing happens with our explanations for why we have
patents: we have them, so there must be a good reasons. If we switched to another system, people
would line up to explain it too.

Burk: Women tend to get the crummy jobs worldwide, so where
scientists are ill-paid (like Spain) they may be relatively more likely to be
scientists and get patents.

Lemley: VCs want patents is self-limiting: once people know
that VCs want patents, it gets manipulated as a signal. But if it’s a
bargaining chip that lets people participate in the market, then it may retain
force.

Silbey: in my work, patent as “a chit” comes up a lot, VCs
and startups alike. Tells us something
about power dynamics, patents as power, how they can be manipulated.

Greg Mandel: Lay attitudes about IP; trying to get understandings of
justifications—they tend to think it’s about anti-plagiarism,
anti-copying. Are they searching for a
moral justification to hang this on, as with the other instances of retroactive
rationalization? Sometimes we give them a scenario and ask if it’s ok w/o
mentioning IP; what comes out in those scenarios is a concern about
attribution, so that seems to be prior to concepts of IP for laypeople. Strong
internal concern about taking credit for other people’s works underlying that.

Burk: Culturally constructed?

Merges: you get the same results with little kids in all
cultures.

Silbey: it’s not that sharing is bad, it’s that taking
credit for others’ work is bad. [I expect the cultural construction comes in on
the question of what counts as “work.”
See, e.g., Joanna Russ’s How to Suppress Women’s Writing.]

Holbrook: Do we think the law should just be reflective of
views?

Lemley: almost never a good idea.

Silbey: how law is involved in institutions incorporating
IP: engineering curriculums have been changing dramatically to incorporate more
joint appointments w/law profs and with computer science. They are IP/privacy/data security professors.
Engineering is institutionally becoming infused w/the importance of some fields
and not others. Other schools, trying to
stand out, are trying to infuse ethics/humanities. MIT is on a huge curricular
reform to get engineers to study more literature and social science. When law is taught in engineering, starts
reaffirming the value of that law.
Engineers start valuing particular signals of what it means to be
excellent in the field; that’s a way that law as a system is functioning to
affect innovation spaces.

Suchman: but engineers often get a black letter, these are
the rules approach, which further reifies the law.

Lemley: disconnect b/t reasons companies patent and what
happens afterwards may have policy implication. B/c reasons for patenting are
largely disconnected from legal rights that result, we have flexibility in
designing our legal rules in ways that won’t significantly impact corporate
decisions. Insensitivity of patent applications/issuance to even dramatic
looking changes in substantive law, both in 80s-2000s to greater protection,
and to lesser protection in recent years.
Hard to tell whether to be happy or sad that the system will merrily
chug along regardless of what we do. If
we thought w/in a certain range we won’t actually disrupt reasons for patenting
or uses of patents as chits, we could save a lot of social cost on the back
litigation end w/o damage to ecosystem as a whole.

Bessen: Is it the upper tail driving the litigation? If most
patents are used defensively, that may be immune to substantive changes, but
other areas, small number of patents we care a lot about, may not.

[redeye daze intensifies]

Merges: we know there are some negative effects in
introducing patents into a patent-free space—dissemination goes down, but maybe
net dissemination doesn’t decrease.
There are other reasons to disseminate.
Tends not to think in terms of oppositions, but about how IP fits into
the larger scheme.

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The Psychology and Sociology of Creativity and IP, Stanford Law School

Posted on September 9, 2016 by rtushnet

Session 1: Why do people create?

Discussion leaders: Jessica Silbey

Why and how? Psychological perspective, individual: b/c it’s
fun, play; problem-solving; creativity as essential to who they
are/identity-forming; as natural.

Literature on extrinsic v. intrinsic motivation. Different
ways of operationalizing extrinsic motivation v. intrinsic. Methods of studying: how are we observing
motivation, how do we collect and interpret that data? Psychology and sociology
have diverse ways of doing this.

Circumstances under which creativity happen: Amabile, Hyde
on lack of constraints—less boundaries, more spatial freedom; Mihaly Cz. theory
of “flow,” Amabile on constraintless play.

Sociological perspective: doesn’t take the unit of
measurement as the person but as the structure. Organizational form: the Linux
corp. Organizational processes:
particular practices inside the organization, such as “release early and
often.” Technological processes:
mechanisms w/in the rituals that support creativity—flows of paper or
machines. In the Linux study: the
version control software and how that process changed the organization. Final level: products—sociologists
infrequently, but do, study outputs to understand how the organization
works. E.g., the chain store as an
innovation of retail; product of a social structure of particular kinds of
markets.

Laura Pedraza-Farina: Sociologists study how science
happens. Communities of scientists have social norms, mostly pro-innovation;
regulate how research gets done. Don’t
distinguish basic/applied; looking at what scientists actually do in the lab
and in industry.

Sociology of expertise: another interesting field studying
organization of expertise; sociology of networks also relevant. Very interested in the study of boundaries:
communities, unity of innovation. Given different names by different
disciplines: social worlds, invisible college, communities of practice. So
definition of community is important; articles are preoccupied with boundaries:
how created, maintained; how does knowledge flow or not flow b/t
communities? Search for information,
recombination of info is constrained by boundaries of community, and innovation
comes from recombination. Dan Burk on
boundary objects: patent silences.
Objects can help breaches.

New research on sociology of networks. Two traditions. (1)
To innovate you need cohesion and trust. (2) To innovate you need to be at a
place where you have access to knowledge from elsewhere: you need to broker
connections b/t communities. New
research on “structural folds”: you need both.
Overlapping membership in groups to get trust; social bonds to promote
trust; but also tension from coming from different cognitive frames.

Silbey: concepts of what counts as creativity in these
communities are also contested.

Commentators: Chris Buccafusco: Silent tertium quid here:
economics. Psychology and sociology of IP=what a lot of us are thinking about
is how these things relate to our assumed ideas about the economics of IP. Psych and soc recast, reframe, challenge the
economic story. Neoclassical economics;
new institutional economics will bring in the new concerns about groups,
societies, infrastructure. Also helps us
think about what we mean by “psychology”—are these questions for
behavioral/experimental econ? Or “pure”
psych? How do we map these
methodological tools for measuring why/what people create.

Breakdowns along subdisciplinary lines. Psych: cleavages b/t
social and personality psychologists, who ask very different questions and have
different answers. Personality psychologists will tell stories about the
creative person and what makes people distinct.
Social = nature of institutions, nature of social relations. As primarily legal scholars, we have
choices. How should we understand these
different answers? Which questions
should we follow up on to give us purchase on questions for legal scholars/regulators? Law tends to deal w/institutions; tends not
to do much if it thinks that people are just very different from each other, if
for example there are “creative people” and “others.”

What do people choose to create? Do they create stuff we
care about, stuff that furthers IP’s goals?
Overproduction of creative goods and the relationship b/t overconfidence
of individuals. We hypothesize, that
unlike mug endowment effect, people really like their paintings before they
paint them (though Dan Burk suggests maybe not after). How people think about their choices in the
creative process. How do risk profiles
and risk influence creative production?
There are differences in personality w/r/t risk, but also differences in
situation. Cognitive diversity in risk frames is really important. When
creators think about designing around, litigation risks, market risks—we need
to know more.

Chris Sprigman: What our scholarship is supposed to be for.
W/in sociology and psych, there are people trying to understand what intrinsic
motivations are and how people respond. Another strand: behavioral economics,
trying to understand whether the neoclassical framework holds up. Interaction so far: people in psych/soc have
fed the people in law & econ doing behavioral work trying to deepen
neoclassical account. We haven’t been feeding them; how can we be better at
talking to our colleagues and giving them reasons to be consumers of our work?

Neoclassical story is attractive b/c it’s linear and gives
you answers/policy suggestions.
Institutional econ complexifies the story. Payoff of virtually every paper that Sprigman
& Buccafusco have worked on is: it’s more complex than that, to which the
answer has been “ok, great.”

Could say: the aim is to describe the world, and it is what
it is. But policymaking is more complex than that. Eckartz et al., how do
incentives affect creativity. Creativity game for making words out of
random letters. Flat fee v. pay per performance v. tournament—if you do very
well, big payment, but otherwise nothing.
Tournament type games are very invigorating, hypothesis goes—but it
turns out that’s not true; people tend to do about the same. People tend to
self-sort into flat fee. Performance is
driven by individual differences not payment scheme. They perform well b/c
they’re good at doing the task. People better at the task tend to self-sort
into pay for performance groups, but they don’t do any better in those groups.

So, under what conditions would a business be well advised
to pay a flat fee? This requires more investigation.

Buccafusco/Bechtold/Sprigman
paper: creativity/innovation heuristics: we make people play different
types of creativity games—we look at decision to innvote v. borrow, though it’s
really borrowing more/borrowing less. See if people respond to real money
incentives to do more of one or the other. The answer: it doesn’t seem to do
much to move people’s behavior. What’s the determinant? In Eckharz it seems to be self-perception of
competence at game. In our study, it seems to be whether they perceive the
problem to be hard. If you can control
decision on innovating/borrowing by varying subjective perception of the
problem, how do you frame the problem to do that? Framing effects may have much more to say
than incentives, b/c even when we made incentives supercompensatory it moved
innovation a little not a lot.

Neoclassical economics doesn’t hold up well. It can fight back—say you’re just detecting a
richer preference set—so it will be an ongoing discussion. More to the point,
what positive contribution that we can make as our distinctive
contribution—connection to policy?
People don’t like complexity!

Julie Cohen: We may still have difficulty putting our finger
on the cultural—it’s in the water (fish says: what the hell is water?); we’re
in a mad rush to colonize it with numbers and empirical studies, but culture is
the everything else that surrounds us. The way to get access to it is not with
running studies but by reading literatures in big traditions in philosophy,
cultural studies, media studies, and allowing ourselves to recognize and admit
into the room the less deterministic and less easy to measure things like
archetypes, memes, values, linguistic traditions. Remember in our systematization that there is
also such a thing as culture.

Deterministic ways of thinking about these processes and and
seeming congeniality of determinate/deterministic methods: in my work, what’s
as important as structure is the absence of structure. Play as
serendipity/freedom to combine disparate things into structures. When I read work that says constraint is
important so we should load on constraints, it makes me unhappy (me too!)
because we need to acknowledge the role of degrees of freedom/play.

Endogeneity of all these factors. Merges & Nelson on patent scope, Burk
& Lemley on policy levers—if you read these side by side, you see M&N
say patents are unsuited to software b/c corporate capital isn’t involved and
it’s individual; B&L 20 years later say that patents are perfectly
suited—b/c institutions have changed, everything else has changed in terms of
economic analysis, policy analysis.
Another example in ©: everything is trolls now. ASCAP was a troll. Then today it’s at the table every time
Congress does anything and no one would dare call it a troll. [Maybe Ann Bartow would.] All the variables are endogenous. Change
institutional structures and people are still creating, but differently;
software has become domesticated/disciplined w/in the patent framework and the
industry looks different. Think about
alternative paths; we tend to take current institutions as inevitable and it’s
worth remembering that everything could have been different and creativity
would not have ended but would have been different; have some humility.

Silbey: Bibliography: there’s a huge literature on risk from
the insurance perspective and sociology of professions: different professions
diagnose and manage risk very differently.
Stereotype threat: if you tell girls they’re bad at math, they do worse
on test. That’s actually related to
Buccafusco/Sprigman work. That’s
important for understanding how we situate ourselves in our universities.

Jeanne Fromer: The literature is complicated; there is no
one-sentence summary about creation and incentives. It’s unfortunate in some
ways that we’ve decided to conclude that incentives diminish creativity; people
have picked up on that thread, which exists and is prominent in Amabile’s work,
but it’s much more nuanced, including in her earlier work. Chris Eisenberger’s meta-study: when you give
people incentives and a goal,
incentives help; if you don’t give them a goal, they were less creative
w/incentives. I’m probably
decontextualizing it more than necessary. We’ve run to legal conclusions faster
than we should. Dialogue w/many in the field, b/c there is diversity, is
something we need to do carefully.

Reason to have the dialogue: it’s important for them to
understand legal institutions. To the extent they’re interested in this world,
they often ask their questions in ways that are a bit askew/not fully legally
salient. So we need to work with them.

David Fagundes: All the experiments are about individual response to
incentives. One twist: vast majority of decisions to create in high $ areas are
made by companies. Is there any reason
to think that institutions come out differently on the incentive front than
individuals? Maybe institutions respond better to extrinsic motivations. [Though institutions are made of
people.] We insist on having a unitary
theory of incentives, and that doesn’t need to be the case. Maybe if there is
something foundational about the individual/institution divide, we need
different incentives; maybe the current system incentivizes institutions as we
want, and everybody else you can’t do much about so we don’t need to worry
about them.

Mark Lemley: One level at which you could read this
literature is to say: the evidence about money as motivation is not great, but
corporations are motivated by money so it all works out. The literature on
commercialization explanations for IP is even weaker than the personal
intrinsic motivations explanation. One
thing in particular: need for IP in many industries is going away as
distribution costs go to zero. There’s a variant that it’s not really
commercialization—it’s that “we hire these creative people only b/c we make
money,” but that leads to the Q whether these people create better w/in
institutions that have hired them to create.

Complexity: what’s the psychology of the response to “it’s
complicated.” How does that get filtered
into policy?

Rob MacCoun: If you ask me to perform in celestial
mechanics, I’ll perform as well for cheese sandwich as for $1 million;
individual differences matter. In equilibrium, a firm will find people who have
ability, but experiments take as a given people who are there. Work on people underestimating their own
ability: people leave money on the table b/c they don’t realize they’re more
efficacious.

Jim Bessen: Power loom improved productivity; many
improvements were unpatented, unpatentable, tacit skills, that increased
productivity even more astonishingly. Most of the creativity wasn’t even the
inventor’s.

Greg Mandel: Complexity is a difficult sell in policy, but
most fields of law involve highly contested justifications for their
bases. Take criminal law: deterrence,
retribution—we still try to study it as deeply as we can before we get to
policy. Disputes in the field around
whether creativity is domain-specific or not; there’s a strong school of
thought that there’s holistic similarity b/t artistic and scientific
creativity, but there are domain-general types of creativity—empathy and
communication v. science and tech v. art.
W/in those fields, there are both domain-general and domain-specific
kinds of creativity.

Abishek Nagaraj: Economics differs from psych/soc in terms
of welfare. Most economists aren’t interested in innovation per se, but in the
implications. Connect differences in
innovation to other outcomes, such as a price impact. This goes to “what
counts” as innovation—the onus is on the researcher to point out welfare
implications of differences in creativity.
Understand completely that it will be context-specific; one approach
would be to directly try natural/archival data; if you study a large enough
data set, that is useful. Flat v. pay
for performance: you might get complicated answers in the lab; there is work on
HHMI grants (flat) versus NIH (more short term). He finds flat incentives lead
to more creative work; even if those answers don’t apply to mugs/individuals,
they’re useful in themselves.

Mark McKenna: Why do we care what other literature has to
say? We are interested in how people
actually behave. Or maybe the stories we
tell in law are actually normative, not empirical. One reason to engage is
holding a mirror up to law & econ to expose its normativity. IP law isn’t
remotely unique in that way. We’ve
learned similar things about how teachers respond to teaching bonuses (they
hate them). There’s no such thing as
“more” creativity. There’s more of some things and less of others, and we’re
making choices; one reason to engage is that we like to have stories about how
our system is one size fits all. We should be more explicit about what we want
and why.

Madhavi Sunder: Why is creativity a social good that we
think it’s important to regulate the production and distribution of in order to
promote social welfare? Other
disciplines can help us structure—incentives for the individual are the tree,
but we should look at the health of the whole forest. Effects on other creators.

Laura Pedraza-Farina: Sociology has specific definitions of
innovation. Do we agree with those metrics?

Andrew Torrance: Schumpeter talks about psych, sociology,
and economics, w/only a law degree; he was able to embrace all. It would be
useful to distinguish some of the things Cohen has talked about—making phase v.
diffusion phase, with different implications from psych/sociological
perspectives. Ruth Schtalk (sp?) looked
at “big five” personality traits and conception, prototyping, and diffusion
phase in survey of German innovators. Openness and risk-taking come up with
great conceptions. Prototyping: they drop out and introverts/high conscientiousness
matters. Diffusion: P2P diffusers have
low conscientiousness; traditional IP users have high conscientiousness.
Innovation can be broken apart, and psych has a lot to say about why we know so
little about where to apply the legal tools in various phases.

Mark Suchman: Policy pushes us to less complex accounts b/c
they seem to cover everything. Law is a
shaper of attention. HIPAA has created a
huge level of response in the industry far beyond rational response to likely
enforcement. [Institutional accounts: the place of the privacy officer!] Law
provides categorical responses that then structure behavior. Software: © v. patent is a good example. These are defaults that affect behavior not
through incentives provided by law but through categories provided by law.

RT: Julie’s right as usual, and I want to emphasize that there
is a gendered aspect to how we talk about creativity, or really a series of
gendered aspects. Take Dave Fagundes’
point: Institutions respond to incentives: well, sort of. Like Soylent Green, instutions are made of
people, and they often respond only to incentives that aren’t threatening to
the individuals who are in charge of the institution at that time. (Compare the response of the music industry
to the rise of digital.) Dollar
for dollar return on movies w/female leads: talk about leaving money on the
table! J.K. Rowling, Stephenie Meyer,
E.L. James: there is a market, but institutions didn’t really believe in it for
a long time. That’s not just
Schumpeterian creative destruction; there’s a reason that these are all women,
and that similar stories exist with rap. Teenage
girls are driving linguistic changes as well as artistic changes, but
there’s nothing that many grownups like to disparage more than teenage girls.

The “we don’t need to worry about creativity outside the
market” position is another version of “housework and childcare are naturally
provisioned for free so we don’t need to think about them in our
policies.” Look at literature on
discrimination: why didn’t the free market get rid of the gender and race wage
gaps? That’s actually a similar question
to why we see differences in creative output that are associated with
demographic categories of interest. (See
Robert
Brauneis & Dotan Oliar’s recent work on copyright, race, gender and
age.) Cultural theory, feminist and critical
race theory.

Ben Depoorter: Does the experiment support a broad, sweeping
statement the way we see in the literature? Tension b/t economists and
behavioral economics. Demand story: many of us want to publish in law reviews,
which requires us to generalize/have ambitious and broad policy
recommendations. We can change our publication priorities—subject ourselves to
peer review by psychologists as a necessary step.

Stephanie Bair: Extrinsic v. intrinsic—there is a type of
motivation that’s technically extrinsic but is a great motivation, which is
accolades from engaging in creative work.
Lots of people have landed on attribution/reputation as a good thing for
IP systems. Other literature: Think a
task is easy = many people have overconfidence bias; hard = underconfidence
bias. Supports the Sprigman/Buccafusco results.

Silbey: case studies are great idea, as Nagaraj said.

Tim Holbrook: How do these incentives, assuming they exist,
get translated through the institutional/corporate structure? Sociological and
linguistic question. Rules of thumb get
translated—Emory had advice about “how many words” you could use in fair
use. Telephone game has gotten more
complex over time. Does this translation
from general to specific account for some of this complexity, allowing
institution-specific tailoring? That
said, the way that this translation happens clearly has social/racial/gender
dynamics, such as how people undervalue themselves in gendered ways.

Fagundes: Maybe we can’t be as confident that new
institutions respond in the same way as old ones. But there is still a money-seeking attitude:
we will make crap as long as you buy it.
I remain skeptical that there’s a unitary motivation in what drives
people to create. One distinction I
haven’t seen teased out is what motivates people to initially invest v. what
continues to motivate them to invest throughout. These aren’t the same, esp.
for institutions.

Lemley: Case studies are great, but not if they are used by
policymakers to set the rules for everybody—they’re often context-specific.

Kate Darling: Legal scholarship isn’t as good as other
disciplines at the bigger picture; we’re able to find issues that are relevant
to policy, and to evaluate what evidence will actually influence policy.

Buccafusco: Descriptive and normative work are both
important and we often do both, but we must still distinguish them.

McKenna: Institutions leaving money on the table for
gendered reasons: that’s clearly a response to incentives, they just aren’t monetary incentives. This is a richer set of preferences that we
tend not to integrate into our economic accounts. We have a hammer and want to
look like nails; our legal tools are less well positioned to deal with those
incentives.

Paul Goldstein: Underlying question of framing the Q of
creativity. Can frame it generally:
across technology and literary/artistic creativity. Suspicious of studies about incentives for
individual creators. Spending time
w/working novelists: Ego makes them work, whether they could make a living with
their writing alone or not. We tend to
look at creativity/creative production as episodic rather than as a continuum;
novelists’ reaction to the first draft though is often horror. [Here
is my favorite point about that, though I’m also a firm believer in fixing
the bad first draft.] What does it take
to actually get from draft 1 to 25? It’s
not necessarily economic incentives but ego.
Leave the individual creator alone to exercise her ego; the answers lie
in ©’s ability to control initial publication, and in human rights.

Julie Cohen: Asking for determinate policy provisions is
only one question one could ask in this space. It’s clear in light of
cultural/institutional evolution that lots of different configurations generate
creativity. “What does this description tell us we should not do?” is an
equally important question. Many policy
propositions may be feasible, but some perhaps should be put off limits.

Stephanie Bair: one response to “individuals don’t need
money incentives” is “that just screws individuals v. big companies again.” A
policy Q: how do we make sure innovative and creative people are able to make a
living? [Well, we can’t do that with IP
policy. You can build it; they don’t
have to come.] If we paid everyone to
follow their passions, who would sweep the streets? [Basic income? Or, as
Sprigman said, raise the wages for street sweeping?]

Suchman: There are © systems (authors’ rights systems) that give
more weight to authors’ ego. We think
about academic scholarship, but notice numbers of authors on average law
review, sociology, physics article—obviously when you’re the 300^th
author on a physics paper, it’s important to your career and ego but perhaps in
a different way. Questions about who has
space to be creative, resources—as much about organizational politics as
anything else—are people on the shop floor allowed to make productivity
enhancing changes, rewarded for it, fired for it, given credit for it?

Lemley: Lurking issue: why do we want creativity? Not obvious we want people to make a living
doing creative things. Huge numbers of people create good stuff not b/c they’re
paid to do it, and not b/c they make a living from it, w/other motivations.
Maybe we want a pro class paid to create b/c we get different creativity and
different is good, or b/c we think pro creativity is better, but this is an empirical
question. Is the pro class actually what
we want as a step towards some instrumental goal of more/better creativity?

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