Shoulda left my phone at home: court upholds most mandatory disclosure of radiation risks

Posted on October 1, 2015 by rtushnet
CTIA – The Wireless Association v. City of Berkeley, No.
C-15-2529 (N.D. Cal. Sept. 21, 2015)
 
CTIA is a nonprofit that represents the wireless industry,
including cell phone retailers.  Berkeley
enacted an ordinance that requires cell phone retailers to provide a certain notice
regarding radiofrequency (RF) energy emitted by cell phones to any customer who
buys or leases a cell phone: 
 
The City of Berkeley requires that
you be provided the following notice: To assure safety, the Federal Government
requires that cell phones meet radio frequency (RF) exposure guidelines.  If you carry or use your phone in a pants or shirt
pocket or tucked into a bra when the phone is ON and connected to a wireless
network, you may exceed the federal guidelines for exposure to RF radiation.
This potential risk is greater for children. 
Refer to the instructions in your phone or user manual for information
about how to use your phone safely.
 
The notice had to be sufficiently large (either displayed at
the point of sale or provided to each consumer) and had to include the City’s
logo.
 
The City’s reasoning was that the FCC established radiation
absorption rates for cell phones, assuming they’d be carried “a small distance
away from the body, e.g., in a holster or belt clip, which was the common
practice at that time.”  Manufacturers
recommend that phones be carried away from the body, but consumers aren’t
generally aware of this.  A survey taken
of 459 registered Berkeley voters before enactment weren’t “aware that the
government’s radiation tests to assure the safety of cell phones assume that a
cell phone would not be carried against your body, but would instead be held at
least 1- to 15 millimeters from your body.” Today, it’s much more common to
have much smaller separations, and consumers might change their behavior “to
better protect themselves and their children” if they were aware of safety recommendations
and manufacturer small-print disclosures (whose general content is mandated by
the FDA) that generally advise consumers not to wear them against their bodies.  However, the FCC and other national and
international organizations have concluded that “the weight of scientific evidence
has not effectively linked exposure to radio frequency energy from mobile
devices with any known health problems,” though more and longer-term studies
are warranted.  Although the FCC doesn’t
endorse the need for more cautious practices, it does provide information on
simple steps consumers can take to reduce their exposure to RF energy.  The FCC’s calculations suggest that some
devices might not be compliant with its exposure limits (set well below the
point at which there’s any evidence of actual health risk) without the use of a
spacer to maintain separation between phone and body, but there was “no
evidence that this poses any significant health risk.” 
 
The court mostly rejected CTIA’s conflict preemption
argument; the City was mainly just referring consumers to the fact that there are FCC standards on RF energy exposure
and tells them to consult their manuals, consistent with the FCC’s own
requirement that cell phone manufacturers disclose to consumers information and
advice about spacing. However, the sentence “This potential risk is greater for
children” was preempted because it said there was a risk, but that was a matter of scientific debate on which the
FCC had never made any pronouncement, and the FCC had never imposed different
RF energy exposure limits for children.
 
The City argued that children were at greater risk because
they are heavy phone users, they often sleep with their phones on or next to
their beds, they often keep phones, close to their bodies, etc.  But that didn’t matter given the FCC’s
position—at most there is a scientific debate regarding the risk to
children. 
 
The court turned to the First Amendment challenge to the
remaining disclosure.  CTIA cited Reed v.
Town of Gilbert, 135 S. Ct. 2218 (2015), arguing that strict scrutiny applied
because the regulation wasn’t content neutral. 
But commercial speech doctrine is inherently non-content neutral; the
only speech at issue here was commercial, and Reed didn’t even come close to suggesting that the doctrine has
been eliminated.
 
CTIA then tried Central
Hudson.  But that’s for restrictions on commercial speech, not
for compelled disclosures, which is covered by Zauderer v. Office of
Disciplinary Counsel of the Supreme Court of Ohio, 471 U.S. 626 (1985),
Milavetz, Gallp & Milavetz, P.A. v. United States, 559 U.S. 229 (2010).  Zauderer
and Milavetz essentially create a rational
basis test for compelled commercial disclosures involving accurate, factual
information.  Such disclosures
“further, rather than hinder[], the First Amendment goal of
the discovery of truth and contribute[] to the efficiency of the ‘marketplace
of ideas.’”  Nat’l Elec. Mfrs. Ass’n v.
Sorrell, 272 F.3d 104 (2d Cir. 2001).
 
CTIA argued that Zauderer
only applies where the government’s interest is in preventing consumer
deception, not promoting public health or safety. The cases don’t support that
claim.  See, e.g., American Meat
Institute v. United States Department of Agriculture., 760 F.3d 18 (D.C. Cir.
2014) (en banc).  Zauderer’s justification—the audience’s interest in receiving
truthful commercial information—sweeps far more broadly than the interest in
remedying deception.   “Indeed, it would make little sense to
conclude that the government has greater power to regulate commercial speech in
order to prevent deception than to protect public health and safety, a core
function of the historic police powers of the states.” 
 
Even worse for CTIA, the court suggested that, where the
compelled disclosure was clearly identified as government speech and not that
of CTIA’s members, a sub-Zauderer
standard might apply, allowing the governement’s speech to be more than “purely
factual and uncontroversial.”  “Where a
law requires a commercial entity engaged in commercial speech merely to permit
a disclosure by the government, rather than compelling speech out of the mouth
of the speaker, the First Amendment interests are less obvious.”  Given the attribution to the government,
limiting the disclosure to factual and uncontroversial matter wasn’t necessary
to minimize the burden on retailers.
 
CTIA conceded that there’d be no First Amendment violation
if the City handed out flyers or had a poster board immediately outside a cell
phone retailer’s store.  This requirement
was not meaningfully different as applied to CTIA’s members’ expression.  The ordinance even expressly allowed
retailers to add comments to the notice if they wanted to.  There was no risk of chilling their speech.
 
Still, because retailers might feel a need to respond to
Berkeley’s notice, the court applied a more exacting form of rational basis
review.  This “requires an examination of
actual state interests and whether the challenged law actually furthers that
interest rather than the traditional rational basis review which permits a law
to be upheld if rationally related to any conceivable interest.”
 
Under the rational basis test, promoting consumer awareness
of the government’s testing procedures and guidelines was obviously a legitimate
governmental interest, and the mandated notice (minus the children warning)
furthered and was reasonably related to that interest, tracking the FCC’s
requirements.  CTIA argued that consumer
understanding was a subterfuge—the real asserted interest was public safety,
but there was no actual associated risk. 
Public health and safety was also a legitimate public interest; the
court concluded that the disclosure was reasonably related to that interest
because, though there was scientific uncertainty and debate, “there is a
reasonable scientific basis to believe that RF radiation at some levels can and
do present health risks.”  The City could
therefore rationally choose to require disclosure of the FCC’s limits and the
fact that the limits assume a minimal amount of spacing between the phone and
the body.  CTIA didn’t contend that the
FCC guidelines themselves were scientifically baseless and hence irrational.
 
Even under a more rigorous application of Zauderer, the ordinance survived.  The predicate requirement is that the
disclosure must be “factual and uncontroversial,” but how to measure that is
unclear:
 
The mere fact of scientific
uncertainty and/or inexactitude does not render the government’s interest in
issuing safety warnings to the public irrational or unreasonable.  Such uncertainty and inexactitude inheres in
the assessment of any risk.  To require
the government to prove a particular quantum of danger before issuing safety
warnings would jeopardize an immeasurable number of laws, regulations, and
directives.
 
(As a side note, the court suggested that it wasn’t clear
who bore the burden of proof under Zauderer.  While the government bears the burden with
respect to speech restrictions, this wasn’t a speech restriction.)
 
Courts shouldn’t lightly deem compelled speech “controversial”
under Zauderer.  Facts themselves “can disconcert, displease,
provoke an emotional response, spark controversy, and even overwhelm reason.”  Milavetz
didn’t even explicitly require that the compelled disclosure be
uncontroversial, asking only that it be factual and accurate.  Uncontroversial, then, should generally mean “accurate.”
 
What about being factual/accurate?  One could argue that the mere fact of
government mandate expresses the government’s opinion that there is something
to be worried about, or that the disclosure should include even more information to give the full
picture.  “But Zauderer cannot be read to establish a ‘factual and uncontroversial’
requirement that can be so easily manipulated that it would effectively bar any
compelled disclosure by the government,” especially when public health and
safety are at issue.  The government isn’t
required to mandate disclosure of everything on each side of a scientific
debate (an impossibility anyway). 
Without the sentence about children, the ordinance easily qualified as
factual, accurate, and uncontroversial.
 
CTIA didn’t like the words “safety” and “radiation,” but the
FCC used those words. “The limits that the agency ultimately chose reflected a
balancing of the risk to public health and safety against the need for a
practical nationwide cell phone system, but it cannot be denied that safety was
a part of that calculus.”  Failure to
explain that RF energy is non-ionizing radiation rather than ionizing radiation
was “immaterial as that distinction would likely have little meaning to the
public…. No one seriously contends that consumers are likely to believe cell
phones emit nuclear radiation or something akin to that.”  CTIA argued that, even if a cell phone is
worn against the body, it was unlikely that federal guidelines would be
exceeded.  But the compelled disclosure
wasn’t required to describe with precision the magnitude of the risk, especially
when coupled with the statement Refer to the instructions in your phone or user
manual for information about how to use your phone safely.”
 
A compelled disclosure also can’t impose an undue burden—and
that has to be a burden on speech, not any kind of burden.  CTIA’s members would rather remain silent,
but allegedly are now being forced to engage in counter-speech. That’s not a
cognizable harm; it’s the opposite of speech being chilled (as it would be if
the disclosure was so onerous that speakers would forego their speech rather
than being forced to make the disclosure). 
Regardless, the burden was minimal at most—retailers had the discretion
to add their own speech to the City’s message. And that message was factual and
uncontroversial, so the need for corrective counterspeech was minimal.

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Right of publicity question of the day, pop music edition

Posted on October 1, 2015 by rtushnet

I present to you Justin Blabaer beer.  (Blabaer = blueberry.)

Is this truly the only cure for “Blabaer fever”?  Will it truly make you shout, “Oh, Baby!”?  So many questions.

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Right of publicity question of the day

Posted on September 30, 2015 by rtushnet

Does the mention of Lin-Manuel Miranda and his amazing, go-listen-to-it-right-now musical Hamilton, in this sponsored post at the Toast violate his right of publicity?

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Silicon Valley darling uses negative option offers, attracts criticism

Posted on September 29, 2015 by rtushnet

This Buzzfeed story suggests that JustFab, which received a billion-dollar valuation, has the same problems as previous FTC-targeted companies started by its founders.

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seeds of disaster: Syngenta must continue to fight claims based on genetically altered seeds

Posted on September 28, 2015 by rtushnet
In re Syngenta AG MIR 162 Corn Litig., Nos. MDL 2591,
14–MD–2591–JWL, 2015 WL 5607600 (D. Kan. Sept. 11, 2015)
 
Corn producers, non-producer corn sellers, and milo
producers sued Syngenta because of its production of genetically altered corn,
which allegedly harmed them in various ways. The court dismissed a number of
claims based on failure to warn; trespass to chattels under all states’ laws
except Louisiana; the corn producers’ claims for private nuisance; Lanham Act false
advertising claims to the extent based on communications that weren’t commercial
advertising; fraud and negligent misrepresentation claims; and some state-law
consumer protection claims, while preserving other claims.  
 
Syngenta developed products called Viptera and Duracade,
intended to make the resulting corn crops more resistant to certain pests, with
traits known as MIR 162 and Event 5307, which isn’t creepy at all. Corn grown
by farmers who did not buy Syngenta’s products gradually became contaminated
with the MIR 162 and Event 5307 traits through cross-pollination from
neighboring fields. Viptera- and Duracade-grown corn was also commingled with
other corn in grain elevators and other storage facilities. Viptera corn
infiltrated the general domestic corn supply.
 
China then began rejecting all corn from the United States
containing the MIR 162 trait, which persisted for over a year. The loss of the
Chinese market for that period caused prices to decrease in the United States,
which in turn caused harm to plaintiffs. 
According to the plaintiffs, Syngenta misrepresented the status,
likelihood, and imminence of Chinese approval and the products’ impact on
export markets, as well as growers’ and others’ ability to avoid infiltration
of Viptera into the entire corn supply (through channeling and otherwise) and
Syngenta’s own steps in that direction. Syngenta’s actions allegedly actually
increased the risk of contamination and commingling of the corn.
 
The producer plaintiffs were corn growers who did not use
Syngenta’s seeds in growing their corn. The non-producer plaintiffs exported,
stored, transported, or sold corn. The milo (sorghum)
plaintiffs alleged that the milo market in the United States was so closely
tied to the corn market that they suffered the same economic damages that corn
producers did.
 
On negligence, the court found that the plaintiffs had
sufficiently alleged that a duty existed to take reasonable care in the
marketing and commercialization of genetically altered corn.  The injuries alleged were not only
foreseeable; they were allegedly foreseen, and Syngenta allegedly
misrepresented the facts to the industry. 
The court rejected Syngenta’s argument that a manufacturer generally has
no duty to control third parties who buy and use its products, absent a special
relationship, and that its corn was no different from guns, cellphones, or meth
precursors.  However, plaintiffs
sufficiently alleged that Syngenta failed to provide assistance (in the form of
channeling and stewardship programs), without which producers and non-producers
could not reasonably avoid contamination and commingling, and that Syngenta
engaged in affirmative conduct that contributed to the harm.  The third parties here didn’t misuse the
products, as with guns, phones, and meth cases; here Syngenta could allegedly
foresee the “misuse” of the product by virtually every customer because they
couldn’t avoid commingling.  Moreover,
the victims weren’t random third parties, but participants in an interconnected
market who Syngenta described as “stakeholders,” thus especially vulnerable to
the allegedly wrongful acts.
 
Syngenta also argued that it shouldn’t be liable because its
products were approved for sale by regulatory agencies, but it didn’t show that
those agencies “necessarily approved (or had the authority to approve) the
commercialization of its products in an unreasonable manner.”  (The court also rejected FIFRA preemption for
the claims as asserted, except any claim based on an alleged failure to warn to
the extent that the claim was based on a lack of warnings in materials
accompanying the products.)
 
For similar reasons, plaintiffs adequately alleged proximate
cause.
 
Syngenta argued that any claims for economic damages for
negligence, negligent misrepresentation, or private nuisance in this case were
barred by the economic loss doctrine, the rule barring a plaintiff from
bringing a claim in negligence to recover solely economic damages, including damages
based on plaintiffs’ theory that corn and milo prices dropped in the market
generally as a result of Syngenta’s actions. 
The court found that, contrary to plaintiffs’ arguments, they hadn’t
alleged physical harm to their property, including contamination of their corn
and harm to their equipment and storage facilities, because their damage theory
was market-based (it wasn’t caused by contamination of any particular corn) and
they didn’t plausibly allege that all
plaintiffs suffered contamination of their corn. 
 
However, the economic loss doctrine is not always applied
when the parties are strangers, rather than related by the purchase of a
product or by a contract.  Only in seven
of the 22 states under whose laws plaintiffs sued had even arguably applied the
economic loss doctrine in a stranger case, and almost all were lack-of-access
or public nuisance cases, where almost anyone could in theory be a
plaintiff.  The court predicted that the
presence of interconnected relationships and markets made this case inapposite
for the application of the stranger economic loss doctrine in all 22 states.
 
Trespass to chattels: Louisiana doesn’t recognize the
common-law tort of trespass to chattels, but instead recognizes a statutory
cause of action for damage to movables; Syngenta didn’t make any arguments
about that, so the court didn’t dismiss the Louisiana claim.  As to the common law claim, the court found
that Syngenta wasn’t responsible for trespass just because it sold a product
knowing that the product would end up interfering with the property of
non-purchasers.  Plaintiffs didn’t
plausibly allege that Viptera grown specifically by Syngenta intermeddled with
their corn, although they could amend to identify specific plaintiffs where
that theory was plausible, since Syngenta did conduct field tests in almost all
the relevant states.  Moreover, the
plaintiffs didn’t even plausibly plead that each producer plaintiff suffered
contamination of its own corn in the fields or in grain elevators, or damage
caused specifically by that contamination (as opposed to harm to the market for
all US corn).
 
Private nuisance: Again, the general rule is that a seller
of a product is not liable for a private nuisance caused by the use of that
product after it has left the seller’s control, a rule that has been applied in
asbestos cases, “even though that hazard exists even with the intended use of the
asbestos-containing product.”  Likewise,
the damages theory wasn’t based on any invasion of plaintiffs’ land.
 
Tortious interference with business expectancy by corn and
milo producers: these claims, somewhat surprisingly, survived.  Plaintiffs didn’t have to identify specific
third parties with whom they had expectancies, given the allegation of an
identifiable class—purchasers of corn, a
commodity that is sold in a defined market. Nor did they
need to allege that Syngenta intended to induce corn purchasers to stop doing
business with plaintiffs, as long as they plausibly alleged that Syngenta had been
substantially certain that interference would occur from its conduct. “One
could reasonably infer from the facts alleged in the complaints that defendants
knew that Viptera had not been approved in a key export market, that
contamination of plaintiffs’ corn would occur after commercialization of
Viptera without certain safeguards, and thus that interference with plaintiffs’
sales would be substantially certain to occur.” 
Although Syngenta argued that it had no plausible motive to disrupt US
corn sales, it could plausibly have wished to maximize its own sales regardless
of whether corn prices were depressed generally.  Nor did regulatory approval of Viptera
matter—it didn’t immunize Syngenta from liability for wrongful conduct in
selling Viptera.
 
Lanham Act false advertising: Syngenta argued that its
alleged misrepresentations couldn’t have proximately caused plaintiffs’
injuries under Lexmark.  The court found that plaintiffs plausibly
alleged that Syngenta’s false and misleading statements caused sales of Viptera
and Duracade, which in turn caused contamination. As for the “zone of
interests” of the Lanham Act, Syngenta argued that plaintiffs weren’t
competitors or in any sort of competitive relationship to Syngenta.  But Lexmark
didn’t require such a relationship.  “Lexmark is most reasonably read as
merely requiring that the plaintiff be a commercial actor, suffering commercial
injuries (lost sales or reputational injury), instead of being a mere consumer
who is “hoodwinked” into purchasing a disappointing product.”  The producer plaintiffs weren’t consumers of
Syngenta seeds or even Viptera corn. 
Their claimed injury, lost sales, was commercial, and they fell into the
zone of interests protected by the Lanham Act. 
This worked even for the milo producers, because of the allegations that
the milo market was so closely tied to the corn market.

As for non-producer plaintiffs, they bought Viptera-contaminated corn. But they
were alleging injuries not as buyers of such corn (consumers disappointed in
the product) but as sellers in the market (as commercial parties).  Nor did they buy the allegedly falsely
advertised seeds.  “[A]lthough they were
arguably injured by getting different corn than they anticipated (because it
contained Viptera), they were not trying to get corn made from Syngenta’s seeds
(and thus were not an indirect consumer of the seeds).”
 
Commercial advertising or promotion provided more of a
barrier as to many of the alleged misrepresentations.  The identified misrepresentations were in
five places: (1) in Syngenta’s deregulation petition to the USDA; (2) in
statements by Syngenta’s Michael Mack in an earnings conference call; (3) in a
request form for Bio–Safety Certificates; (4) in a “Plant with Confidence Fact
Sheet;” and (5) in a letter by Syngenta’s Chuck Lee.  Syngenta didn’t challenge that the fact sheet
was commercial advertising or promotion.
 
Under Proctor & Gamble Co. v. Haugen, 222 F.3d 1262
(10th Cir. 2000), actionable the representations must be “for the purpose of
influencing customers to buy defendant’s good or services.” “While the
representations need not be made in a ‘classic advertising campaign,” but may
consist instead of more informal types of ‘promotion,’ the representations …
must be disseminated sufficiently to the relevant purchasing public to
constitute ‘advertising’ or ‘promotion’ within that industry.” The deregulation
petition, as a petition to the government, was not obviously commercial
advertising or promotion.  Though
statements in government petitions could be made more for PR purposes/reaching
consumers than for truly addressing the government’s requirements, plaintiffs
didn’t plead sufficient facts supporting the inference that the challenged representations
(about the financial effects of approval on the market for corn) were of that
nature.
 
Syngenta also argued that the statements in the petition
weren’t sufficiently disseminated to constitute promotion.  Plaintiffs alleged that online availability
of the petition, and availability to any consumer who wished to review it, were
sufficient, but without additional facts it wasn’t plausible to infer that “statements
in a regulatory petition that is available—but not necessarily affirmatively
distributed to anyone—were sufficiently disseminated to constitute promotion or
advertising.”
 
Similarly, the earnings conference call was directed at
investors and analysts, not consumers, and “[o]ne would not ordinarily expect a
quarterly earnings call to be made for the purpose of influencing customers.”
Again, without more, this wasn’t plausibly commercial promotion, nor was it
plausibly sufficiently disseminated. 
Mere availability on the internet didn’t equate with dissemination to
the public.  “Plaintiffs have not pleaded
that Mr. Mack’s statement actually reached some significant portion of the
relevant public (customers of Syngenta).” 
(I’m worried about this statement in other contexts—when advertising is directed at consumers, then the fact
that we’re not sure how many consumers read it shouldn’t be dispositive,
especially on a motion to dismiss; exactly how should a plaintiff plausibly
prove that lots of consumers saw material on the defendant’s website, a matter
within the defendant’s knowledge?)
 
Syngenta also allegedly distributed a request form for
Bio–Safety Certificates issued by the Chinese government, knowing that it was
useless in the absence of Chinese approval, in order to mislead farmers. But
the certificates were provided to grain exporters and resellers, and weren’t
pled to be used by Syngenta’s customers to influence sales.
 
Perhaps more used to securities law litigation, Syngenta
argued that its statements were non-actionable forward-looking predictions and
opinions. The court found that statements of Syngenta’s present expectations
could constitute misrepresentations of fact.
 
Then came various state-law consumer protection claims.  Plaintiffs brought their Minnesota Unfair
Trade Practices Act and Minnesota Consumer Fraud Act claims under the state’s
Private Attorney General statute, only allows a private right of action if the
plaintiff’s claim benefits the public. Since plaintiffs were seeking only
damages and not an injunction, and since clarifying the nature of legal duties
wasn’t itself enough to provide a public benefit (or any old case would
qualify), the court dismissed the Private AG claims; there were no independent
claims under the MUTPA (probably because only the Private AG statute offered
the prospect of attorneys’ fees).  MUTPA
doesn’t apply to merchants, but there was a fact question about whether these
plaintiffs were sophisticated merchants in the relevant area.  (Wait, shouldn’t it be the actual purchasers
from Syngenta whose sophistication is assessed, since it’s their purchases that
allegedly provided the causal link between Syngenta’s conduct and the market
collapse?)
 
Although Syngenta Seeds is a Minnesota corporation, the
court concluded that Minnesota’s consumer protection statutes didn’t apply to
non-Minnesota resident plaintiffs.
 
Claims, or parts of claims, under other states’ consumer
protection laws survived: Colorado, Illinois, Nebraska, and North Carolina.  The court rejected various arguments that
some of those states didn’t allow non-consumer plaintiffs.  North Dakota consumer protection claims were
treated like the Lanham Act claims because North Dakota law prohibits the use
of deceptive practices “with the intent that others rely thereon in connection
with the sale or advertisement of any merchandise.”
 

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More on VW and the DMCA

Posted on September 28, 2015 by rtushnet

NPR has a short piece here.

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Notice and Notice Failure at BU, panel 8

Posted on September 26, 2015 by rtushnet
Robert Bone – Notice Failure and Defenses in Trademark Law
 
Bone’s basic argument: Principal notice issue in TM is
uncertainty about scope, and principal problem is chilling effects. Bone finds
an important distinction between unauthorized uses that implicate rights and
uses that are valued only for efficiency reasons. Categorical exclusions work
well for uses that implicate rights but not very well for uses valued only for
efficiency reasons (except for trade dress). 
Proposal: non-expressive nominative/descriptive fair use cases, and
trade dress cases, should require proof of actual confusion (not just likely
confusion) and significant risk of substantial TM-related injury to receive
relief.
 
Favored/socially valued uses and possible susceptibility to
chilling effects: four kinds.  (1)
Copying/use of trade dress product design to compete in the underlying market.  (2) uses to inform consumers/the market about
aspects of the D’s product—descriptive fair uses, nominative fair use, resale
uses. (3) a special subset is use of the mark in technological contexts, such
as metatags/AdWords.  (4) Expressive uses—gripe
sites, parody, etc.
 
Causes of notice deficiencies & seriousness of the
problem.  Less problem w/identifying a
claimant to the mark, usually, b/c of public use requirement. Some favored uses
even involve copying or knowing something about the P’s mark.  Real problem is the problem of defining the
scope of the rights.  Likely confusion,
dilution.  Two features contribute to
uncertainty of likely confusion: it’s difficult to tell whether your use is
infringing; fact-dependence generates litigation costs/risks that can be
strategically leveraged to chill favored uses.
 
How serious are these problems?  Chilling effect is identified in the
literature, but when you think about costs it creates, it’s not so much about
impeding innovation, b/c that’s not what TM is for (unless you’re European),
and it’s not about interfering w/ a licensing market; it’s not about info
costs.  It’s just chilling favored uses
through litigation cost/risk.  Break this
down for different uses and users.
 
Trade dress uses: can they be chilled?  Large firms using marks to communicate
information about their products? 
Expressive/tech related uses are more susceptible to chilling effects
b/c of risk aversion & resource constraints.
 
Maybe someone is chilled from a favored use b/c litigation
cost/risk exceeds benefit.  Expressive
uses are an example.  Magnified by risk
aversion on the part of the expressive user. 
Startups may be chilled—suffer from resource constraints and
susceptibility to risk.  But trade dress
involving established firms copying to compete in the underlying market, the
benefit to them is large; don’t have resource constraints; don’t have high risk
aversion. Instead, the cost may be greater than the benefit if preliminary
injunctions are granted routinely.  But
we need to think a little harder about why we have the problems and therefore
how serious they are.  We assume they’re
equally serious across the board, but maybe not.
 
What do we do?  A
number of proposals floating around.  One
way: narrow TM liability w/r/t sponsorship/affiliation confusion; post-sale and
initial interest confusion.  I support
that to some extent but you can cut back and still have chilling costs from
likely confusion test—b/c it’s fact dependent it’s hard to get summary
judgment/early decision.
 
Second way: categorical exclusions—defenses that protect
favored uses, or some subset. Courts tend to resist that except in expressive
use cases.  Problems of defining a
favored use—descriptive use test has to figure out whether the use is descriptive;
we could look at intent, but that doesn’t
fit TM policy well; we could look at consumer understanding, but then the
meaning of a use is contextual and must be assessed by reference to the market.  That reintroduces difficult factual
issues.  Second problem: it’s not easy to
justify, w/in TM policy, an absolute categorical exclusion. Much easier for
uses that are protected by rights.  A
right trumps/constrains utility; if TM is fundamentally utilitarian, a
rights-protected use may simply override utility/TM policy.  However, for the rest of the uses, the policy
goals of those uses/values of those uses is understood in utilitarian
terms. 
 
Use procedural law
& modify substantive test for favored uses other than expressive uses, nor
trade dress which is also ok with a categorical rule.  For infringement liability, TM owner must
plead and prove secondary meaning + D’s use creates actual confusion about
source or sponsorship + significant risk of TM related harm that’s
serious.   Tighten up on preliminary injunctions.  Escape valve/early exit from litigation for
most favored uses.
 
Rebecca Tushnet: This
is part of a story about what we lost when we abandoned theories of TM harm and
shifted to theories only of confusion.  Also
a story of First Amendment exceptionalism: expressive use?  Except for functional trade dress,
constitutional lawyers would say it’s all expressive uses.  Even applying Central Hudson, current treatment of TM is, to say the least,
underjustified.
 
Bone says:
Categorical exclusions from coverage don’t fit well with TM and balancing tests
are a better fit w/TM’s market focus, except with rights that serve as trumps
(like the First Amendment).  (Which
others?  The Second?)  But lack of actual evidence used in most
balancing test cases makes this conclusion complicated.  True, courts say they are concerned with
confusion, but then they routinely just eyeball the use—9th Circuit and 7th are
the worst offenders.  The multifactor
confusion test isn’t a trump-based rule, true, but it’s not really a marketplace
test either—it’s an “imagine the marketplace” test and the question of whether
that’s on balance better than a bunch of categorical rules is even more complex
once we consider the costs of foregoing actual marketplace inquiry along with
the benefits. 
 
Bone says we lack
the empirical evidence to know whether the error costs from a rule in terms of
missing actual confusion versus suppressing uses that aren’t confusing are
greater or lesser than the error costs from a case by case standard, esp. in descriptive
fair use/trade dress cases.  But that is
true both in the context of rights as trumps and non-trumps.  Bone therefore attempts to set out when we
should, for reasons based on our prior assessments of the costs of over and
underenforcement, choose a rule or a standard.
 
Bone opposes rules
(at least in non-trump cases) because a blanket rule encourages TM users to
push the limits, and if consumers do blame the TM owner for a bad experience,
then its ability to communicate will be impaired.  But in each case I’d want to ask: what is the
TM user’s incentive to push the limits? 
Maybe the argument is that we can expect a normal distribution of uses
either affected by fear of TM liability or indifferent to that fear, so we can
expect more confusion with a rule that is more protective of unauthorized
users, but is that plausible?  For the
example of expressive uses of marks, the likely motive is realism, as far as we
can tell, or commentary on reality (in the Grand Theft Auto/Pig Pen case).  Those motives seem worth encouraging, and
there is little reason to expect consumers are incapable of distinguishing the
performance of a video game helicopter from that of an actual helicopter, even
if they are customers of both (unlikely). Interference with social meaning—Veblen
goods functions of a TM—seems distinctly possible, but that’s very different
harm. 
 
Compare the
incentive in a descriptive use case: the decided cases don’t give us a random
sample of the relevant situations, but I can’t say I see many with motives to
appropriate the plaintiff’s goodwill—instead at most I see indifference to the plaintiff’s goodwill and interest in using the
descriptive benefits of the term at issue, from “Gatorade is Thirst Aid” to
“Sealed with a Kiss” to “Own Your Power.”  If we look at descriptive fair use as another
doctrine that gives trademark owners an incentive to choose inherently
distinctive terms, then the argument for favoring trademark owners in cases of
doubt gets weaker because such a rule diminishes the incentive function of the
rule for trademark owners/choosers.  So
we have to balance a lot of competing interests and policies.  (Also a related question: are the descriptive
and nominative fair use tests rules or standards in Bone’s formulation?  Nominative fair use looks more rule-like, but
concepts like using no more of the mark than necessary might seem
standard-like.)
 
Really interesting
argument in the paper: trade dress is good candidate for rules even though it’s
not (always) a rights-based limitation b/c other identification means are
always available w/r/t any given design. 
TM owners may contest that—in Qualitex,
would there be an equally perceptible symbol for non-English speaking
users?  Or are you implicitly also
disavowing post-sale confusion and similar doctrines in order to reach this
conclusion.
 
Another important
point from the paper: Descriptive use and trade dress provide us with big
classes of cases in which even limiting liability to source confusion doesn’t
do much to limit the scope of threats that can deter use.  So the many proposals academics have made to
cut back on the idea of sponsorship confusion won’t help there.
 
Proposal: require
secondary meaning in all cases involving nominative use, descriptive use, or
trade dress, even w/inherent distinctiveness. 
To prevail, plaintiff must show substantial confusion, likely with a
survey, + serious risk of TM harm. If defendant’s products/services are high
quality, then irreparable harm isn’t likely. 
(1) Note that eBay may be
doing this in all cases—any need for a TM specific theory?  TM owners abandoned harm stories and the
confusion branch broke under them once eBay
applied.  
 
(2) Is this really a
shift from standards to rules or a hike in the burden of proof?  That is, suppose we didn’t require secondary
meaning in all cases, just substantial confusion + serious risk of TM harm.  Wouldn’t we get the same results?  Is there any reason not to apply this
standard to the entire universe of TM cases? 
I take it Bone’s response will be that overenforcement isn’t as much of
a problem in classic “does Borden for ice cream infringe Borden for milk?”
cases as underenforcement is.  But do we
actually know this? [Side note: any role for incontestability here?]
 
Stacey Dogan – Bullying and Opportunism in Trademark and
Right-of-Publicity Law
 
Notice can sometimes feel like an undisciplined concept,
applicable to any legal ambiguity.  Existence
of notice failures that wouldn’t lead to bargaining failure—the accused
infringer would just walk away. That’s a broader conception of notice, but
really helpful nonetheless.
 
Paper contends that features of TM and right of publicity
law make it costly and sometimes impossible to know when you need permission to
engage in certain behavior or refrain from it. 
A couple of wrinkles: motivated initially by an INTA panel on TM
bullying.  Overclaiming or as PTO report
to Congress said, abusive litigation strategies, enabled by ambiguities about
contours of TM owners’ legal rights.  At
the same time, working on right of publicity law, and people also worry about
overclaiming in that context.  In both
cases, ambiguity about outer limits of rightsholders’ interests generates
overclaiming; this makes sense from rightsholders’ POV for several reasons.
 
(1) Notice failure about purpose, existence, and shape of
legal rights.  (2) Unique to TM: notice
failures in enforcement process.  (3)
Legal incentives to assert rights against uses that neither harm them nor
explicitly exploit the value of their mark in a merchandising way.  Trying to limit concerns about lack of
notice, but hard to separate those concerns from substantive concerns—you really
don’t like the scope of the right.  That’s
true.
 
Why, what, and how: some of us like to talk about TM as
protecting integrity of information to make markets more competitive. If that
were the clear normative focus of the law, then even standards rather than
rules could move towards a harm-focused regime that moved toward that normative
goal.  But in many cases the law
broadened away from competition-oriented focus, not always explicitly—protecting
against the exploitation of parties’ trademarks.  This normative ambivalence makes it
challenging to say clearly why we have TM and its limits.
 
Ambiguity in the what: not just likely confusion, but also
protectability.  Whether trade dress has
secondary meaning—who knows?
 
How: for right of publicity, expressive uses are the biggest
source of ambiguity.  Where in TM Rogers v. Grimaldi we’ve moved towards
clarity, right of publicity claims remain indeterminate.
 
Notice failure in enforcement: C&D practice is a primary
source of actual practice of TM holders’ and users’ rights in marketplace,
which raises real transparency concerns. Lawyers send letters; people back down
either b/c they think the claims are plausible or it’s early enough in their
business that they can change with less trouble.  You persuade the first recipients of your
letters to back down, and then you have a record of enforcement that’s scary
when you list the people who’ve already acquiesced in subsequent letters—a sort
of common law. 
Adjudication/rules/decided cases have notice functions of their own; if
C&Ds are the de facto ways people decide what to do, risks a ratcheting up,
similar to Jim Gibson’s work.

Exacerbating doctrines, most pertinent in TM: vagueness of boundaries explain
veneer of plausibility for questionable claims. 
Econ incentive to assert in many cases. 
NFL threatens anyone who tries to refer to the Super Bowl nominatively
in advertising. It’s ridiculous.  But
they actually have an economic reason to do that.  What if there’s no harm/loss? B/c the rules
of TM law encourage owners to stick their elbows out so the mark seems “strong.”
Monster Cable & Monster Energy behave badly—Monster Cable went after
Monster Mini-Golf. 
 
Bruce Keller, DOJ (formerly of Debevoise & Plimpton)
 
TM and right of publicity cause problems when cut loose to
doctrinal moorings.  Some lawsuits are
stupid and should be litigated to the point where that’s proven in court. 
 
Concept of bullying: I’ve written lots of C&D letters
and responded to lots of dumb ones and never felt abused.  Didn’t reflect personal experiences
[representing very well-represented and well-heeled parties!]—a lot of these
complaints are anecdotal.  The label
bullying/abusive masks a lot of what’s really going on.  A large company going after a small one isn’t
the only scenario—a small one going after a large one for reverse confusion is
also a possibility for use.  And this has
happened for a while.  Oasis was sued by
a small Italian wedding band from New Jersey in the 1990s—that’s not large v.
small bullying but a small co. with a classic failure of notice.
 
Represented four companies getting demand letters from “History
Makers” used in connection with educational services in relation to
African-American history.  Those demand
letters are silly, but not abusive. 
Maine Lobster Promotional Council: “the ultimate white meat.” Pork
producers sued the council; went away after pretrial conference, and they were
shamed by publicity.  When dismissed, the
council issued a press release: “We’re glad to have this behind us; we’re happy
as pigs in mud.”  Bullying doesn’t
explain these cases.  [Note that the pork
producers went on to harass women selling pro-breastfeeding “The Other White
Milk” shirts, so they may not have learned the lesson.]
 
Useful constraint: The concept of TM use: a material use in
a purchasing context should be rigorously enforced; same with advertising or
trade purposes in right of publicity cases. 
Dryer v. NFL case, pending in 8th Circuit.  Classic expressive speech about old NFL
games.  There’s nothing wrong with
sponsorship/endorsement being used in the right circumstances.  If you invigorate trademark use, you won’t
end up with very many bad decisions.
 
There’s a huge difference between asserting a claim and
trying a case to a successful conclusion. It’s easy to bring a claim and not so
easy to win it.  [I say it as: when
someone asks if they can be sued over activity X, I always respond ‘It’s
America—someone can always sue. But can they win?’]  Example: Spiderman case, where the owner of
building in Times Square sued for infringement b/c billboards had been edited
to show ads for Sony’s co-promotion partners. 
Laughed out of court, b/c Sony’s counsel said: the P’s theory of the
case was that the billboards in the movies weren’t real.  But Spiderman’s not real either.  No TM use.
 
Lemley: sure, you can make a weak letter go away—if you can
afford to hire Debevoise. The worry is the people who can’t, with no
lawyer/solo practitioners.  Don’t we need
more than “I can win this suit”?
 
Keller: True, though I was pro bono in some of these. The
question is whether there’s a problem w/the law or with resource allocation of
lawyers to people in need.  Not clear that
retrofitting TM is necessary—overreaction.
 
Von Lohmann: I would love additional empirical evidence on
chilling effects. Beebe’s research can’t help us, b/c chilling effect comes
from demand letters and not cases. I’d love it if lawyers were required to send
demand letters to chillingeffects.org. 
But without that, we’re left w/anecdotes.  9 years at EFF = plenty of anecdotes of
abusive demand letters. 
 
Keller: True, but we have much more transparency now than we
did in the early 1990s.  Eat More Kale
guy—more ability to spread the information than there was 20 years ago.  Do we need dramatic changes to the law?
 
Q: Early adjudications and sanctions should be more
aggressively employed. Judges let cases go on so long that they become very
expensive.
 
Keller: It’s very difficult to get—judges are reluctant, for
lots of reasons. 
 
Dogan: Part of the reason is the incredibly fact intensive
subjective inquiry—makes it hard to reject out of hand in some of these cases.
 
Bone: Sanctions can be part of a solution; there are costs
to that. 
 
RT: move in © cases to dismiss on motion to dismiss in fair
use cases. We could do better in TM too. 
Have fees—if you bring a Rogers v.
Grimaldi-barred claim that can be dismissed on a motion to dismiss, then
you should pay D’s fees. 
 
Dogan: if courts take irreparable harm seriously, see fewer
injunctions.  (I think this also affects
plausibility of pleading harm, which may also be evaluated on a motion to
dismiss.)
 
Bone: responding to RT: If eBay is fully implemented, then many of the problems we have may go
away.
 
Q: practicing lawyer: People who start a business never
imagine that they may succeed enough to get a C&D.  If we could teach solo practitioners to have
TM search done at the outset that would be very helpful.
 
Bone: Note on expressive uses—I’m not talking about the
constitutional right, but about the justification for the constitutional right—a
moral justification that serves as a trump to TM utilitarianism.  If utilitarian/consequentialist
justifications exist for the constitutional right, matters get more
complicated.  (As indeed the
justification for truthful commercial speech is.)

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Notice and Notice Failure at BU, panel 7

Posted on September 26, 2015 by rtushnet
Mark Lemley – Ready for Patenting
 
Patent’s problematic approach to what we want to encourage
when we grant a patent. Long struggle with what you are giving us is simply an
idea/conception or an actual thing/reduction to practice.  Various doctrines point in different,
sometimes conflicting directions; most obvious is §102(g) priority rules under
pre-AIA provisions—tried very hard to split the baby; invention is reduction to
practice + conception + diligence in working to reduce to practice to figure
out first inventor. Even pre-AIA, thumb on scale in favor of early
filing/against reduction to practice in various ways.  Constructive reduction to practice is the
easiest thing to do—get a patent application on file and you’re done in a
priority contest; everyone else needs fairly substantial evidence.
 
If you have an idea, you can (1) tinker and try to make a
working device; that’s costly and lengthy, or (2) head to the patent office,
which is more likely to leave you labeled the first inventor if a priority
dispute emerges.
 
Also, if you choose constructive reduction to practice by
filing, there’s no need to show it works for its intended purpose.  If you make the thing, you have to show it
works.  If you do the former, then if it
works, you win; if it fails, no big deal. You do have to demonstrate enablement
and written description, but enablement isn’t that difficult a burden.  §112 information required isn’t that
difficult, b/c among other things the legal standard doesn’t require you to
tell us how to make it work, only enough that a PHOSITA could make it work
without undue experimentation.  Fed. Cir.
has been quite dismissive of actual building/experimenting in various
ways.  Definition of inventorship—court says
the people who just built it are mere tinkerers and don’t count; inventors are
the ones w/the idea. Infamous statements about software: you don’t have to
disclose code or high level flowcharts because “actually writing a computer
program is necessarily a mere clerical function for a skilled programmer.”  Heh.
 
If the pre-AIA statute put a thumb on the scale for early
filing, AIA puts a fist.  And the
elimination of experimental use (doesn’t think that’s right interpretation, but
PTO’s implementing regulations say there’s no experimental use defense) makes
it difficult if you wanted to keep tinkering before filing.  Even if the defense survives, it’s lost
force.  Pre-AIA, once you were the first
inventor experimenting, neither my own acts nor subsequent inventions could
affect my patent.  Post-AIA, at most I
get a year to prevent my own conduct from barring patent, but the only way to
prevent other people’s conduct from being a bar is to make a public disclosure,
when most experimentation by its nature is private. 

Result: patent info tends to be thinner. 
We learn a lot by doing, figuring out what does and doesn’t work.  At the same time, patents tend to be written
more broadly b/c not constrained by what’s practical or what works: write
patents in broad functional terms precisely when they haven’t gotten the thing
to work.  By encouraging early filing, we
give the world less info and get broader/worse patents, particularly for
software.
 
What can we do? 
Require either commercialization or reduction to practice, says Chris
Cotropia. Thinks that goes too far and is impractical for some technologies
(e.g., my great idea for organizing a semiconductor fab, which costs millions).
We’d like to have a world in which people who have a good idea but aren’t in
good position to test it can sell it to others who are.  Paper patents thus serve a useful purpose but
at a minimum we ought to be neutral as to whether or not you actually built
something.
 
How?  (1) we ought to
keep experimental use. (2) strengthen §112, particularly as applied to paper
patentees.  Enablement standard should be
raised, either across the board or for paper patentees.  Limit you to predictions you’ve actually
made.  (3) small extension to prior user
rights.  Prior secret invention no longer
later prevents you from patenting, but in theory I have a prior user
right.  We ought to extend prior user
rights not just to commercial use but experimentation.  Building and testing before someone shows up
at patent office = at least protect those people from being punished b/c they
chose to build rather than simply to patent.
 
Paul Gugliuzza: There are still reasons to confer patent on
the entity that wins the race to the patent office.  (1) Earlier expiration/entry into the public
domain.  But is that really persuasive?
How much will it matter? Related patents might also block entry. Paper might
not want to concede benefits from marginally earlier expiration encouraged by
early filing.  (2) Courts don’t have to
conduct costly/context specific inquiries about diligence in reduction to
practice; was the prior user really using it; etc.  Interested in hearing about cost/benefit
tradeoff in messy validity/novelty fights. 
 
Enablement via prophecy: could we do that entirely? If so,
what type of disclosure should we require, if you don’t want to go all the way
to reduction to practice? What standard would go beyond “no undue
experimentation”?
 
John Duffy – Counterproductive Notice Requirements and
Literalistic Claiming
 
We’ve messed up and we should go back in time.  If law imposes difficult to satisfy notice
requirements and invalidates the whole right as a penalty for noncompliance,
the enforcement mechanism weakens notice. Invalidation of the whole right
transforms imprecisions at the edges of the right where uncertainty is greatest
into uncertainty throughout the entirety of the right.  (Encourages people to litigate even at the
center.)
 
Major problem—pre-CAFC law tolerated fuzzy boundaries but
provided more certain notice.  Return to
pre-CAFC law because it’s based in never-overruled SCt precedents and b/c it’s
superior public policy.
 
Liebel Flarsheim v. Medrad is a poster child for all that’s
wrong.  DCt interprets claim term “inejctor”
to be limited to injector w/pressure jacket; CAFC reverses b/c there’s no
ambiguity. Years later, CAFC invalidates the claim b/c the specification shows
no injector w/o a pressure jacket. 9 years of litigation to get the right claim
interpretation only to have that interpretation invalidate the claim. That’s
insane.
 
Things that are wrong w/CAFC approach: (1) consistently
refuses to limit scope to structures disclosed in specification and their
equivalents. (2) treats canon of construing claims to preserve validity as a
last resort not a first principle. (3) eschews any attempt to discover the real
merit of the invention as a step in defining rights. All represent abandonment
of pre-CAFC law.  Many critics have
thought these were symptoms of peripheral claiming and advocated for a return
to central claiming (Lemley, Fromer)—but the CAFC is not doing peripheral
claiming.  Prior-CAFC, peripheral
claiming meant something much different: Risdale Ellis, who named peripheral
claiming, said in 1949 that it measn that infringement requires: “(1) the claim
must read in terms on the alleged infringing structure. (2) The alleged
infringing structure must be the equivalent of anything disclosed by the patentee.”  Peripheral claiming wasn’t a rigid rule of
everything within the claim being the patentee’s—a different version of doctrine
of equivalents, in which the doctrine narrows the claims. That’s why old SCt
cases are always talking about the doctrine of equivalents. 
 
CAFC’s literalistic one-step test of claiming is radically
new and inconsistent w/SCt precedent and even CAFC’s own prior precedent.  They purported to adopt the jurisprudence of
CCPA and the Court of Claims, and the latter used a requirement that didn’t
just require the claims to read literally on the accused structures, but also a
determination that the accused structures do the same work, in substantially
the same way, and accomplish substantially the same result.  Autogiro v. US, triple identity test for doctrine
of equivalents.  Very presciently said
that making literal overlap only a step and not the entire test was consistent
since 1898.  This is not an argument
about a “defense” to infringement that CAFC has repeatedly rejected. This is a
requirement of infringement analysis.
 
The consequence of CAFC change: allowing literality to
satisfy the infringement test rewards literary skill/drafting, not
invention.  Collateral consequences:
traditionally we look into the art to find the real merit of the alleged
discovery/invention.  Never discuss
pioneering patents any more.  CAFC:
validity preservation is a last resort only when a claim is still ambiguous
after everything else has been tried. 
 
Patent claims are like metes and bounds system, which is
vague and not certain, as real property authorities say.  When patent lawyers say “metes and bounds,”
don’t think precision!  Think vagueness.  The terrain is irregular and mountainous; we’re
stuck with metes and bounds, but then we need to use their tools—always try to
preserve validity.  So practically, a
cert petition should ask the SCt: whether a defendant may be held liable for
infringement where the patent discloses nothing equivalent to the products or
processes accused of infringing. 
Prior-CAFC law: the answer is clearly no, not yes at is in the CAFC now.
 
Commentators: Henry Smith
 
Calls into question the assumption that peripheral claiming
involves specifying patent’s outer bounds exactly; conventional wisdom is that
central claiming started from the center and worked outwards.
 
Missing link: equity. Doctrine of equivalents is an
equitable doctrine.  Explains how
peripheral claiming works, why it fell out of favor, the limits built into it,
and what would be required to bring it back. 
 
Equity is called for as a solution to opportunism;
conflicting rights (nuisance); polycentric problems (like those that gave rise
to class actions).
 
Older guidance: Ellis does say that doctrine of equiv. is
used to narrow the literal claim. Also used to determine if a claim is too
broad. Under peripheral claiming, DOE can be used to narrow a claim, never to
broaden it, w/narrow qualifications. We rarely worry about patentee being too
modest about claims. 
 
Why the change?  Fusion
of law and equity; post fusion, function of equity can become obscure.  Equity either becomes the general case
(realist, contextualist) or highly disfavored (neoformalist, literalistic).
Suspicions about overexpansive IP and notice failure reinforce suspicion of
equity. Does this apply in the narrowing direction, and if so how much?
 
Is equitable intervention (exceptional in principle)
justified? Is the gain from preventing opportunism and solving complex problems
worth the uncertainty that selective intervention causes?  We don’t trust judges w/notions of commercial
morality etc. now, and if we don’t equitable interventions seem more
problematic.  One last reason for
pessimism: it’s time for the SCt to do something, Duffy says, but SCt’s track
record on resuscitating traditional equitable doctrines is terrible; we’d get a
4- or 5-part test bearing no relationship to the doctrine he just discussed.
Not willing to get on the equitable train if the SCt is the engineer.
 
Meurer: do you favor grace periods/international
harmonization?
 
Lemley: if we could get other countries to sign on to a
grace period as part of harmonization he’d be in favor. If it meant getting rid
of any vestige of encouraging building the thing, then no.
 
Duffy: Landes wrote the bible on claim drafting in the
second half of the 20th century. In the 1970s he talked about means
plus function; today the conventional wisdom is that’s narrowing.  Landes says in 1970s that’s not a problem b/c
it gives you the broadest interpretation you’d ever be entitled to. This wasn’t
a special rule for means plus function elements.  The standard rule allowed more functional
analysis about how much contribution you’d made.  How can you tell how meritorious an invention
is?  Even today, people will say things
like “this is a strong case of obviousness”—how do they know? B/c we can tell
the difference!  And if we can’t tell the
difference between a pioneering advance that changes the art and a trivial
advance, we have no hope of running a patent system.
 
Lemley: this is an explanation of why the abstract ideas
branch of §101 is playing a new role: responding to the absence of constraint
we built into the system a generation ago. One response is to go back to means
plus function claims; hard to say that’s an abstract idea.  People w/the most difficulty doing that are
the paper patentees, to link that to my paper.
 
Duffy: DOE was told to juries—so not equity in that way, and
not equity just b/c it’s fuzzy.
 
Smith: equity can work functionally even on the legal
side. 

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Notice and Notice Failure at BU, panel 6

Posted on September 26, 2015 by rtushnet
Margaret Jane Radin – Patent Notice and the Trouble with
Plain Meaning
 
Notice is a cost and a cost-saver; hard to figure out its
overall profile.  Plain meaning as
ever-receding ideal.
 
Philips v. AWH (Fed. Cir. 2005); Festo (2002).  In Philips,
Fed. Cir. laid out interpretive procedure agreed on by all but 2 judges to
focus on entire available text, including prosecution history. Only useful from
notice POV if they generate more predictable outcomes—but they still didn’t get
the same answer when they applied the agreed-on interpretive approach to the
facts before them.  Not clear that the
interpretive models affect outcomes, compared to priors.  If context really does matter, then intuition
is not necessarily a huge problem.  Maybe
plain meaning is really closet holism.
 
Festo: Introduced the concept of describability.  Doctrine of equivalents and file wrapper
estoppel.  At least estopped from
claiming something described and disallowed during prosecution.  But broader implications: it’s a crucial
issue whether an equivalent could’ve been described in language when the claim
was drafted, and this can occur even w/o claims being amended.  Describability can change over time; if it
was describable at the time of prosecution then you can’t get it, and if it’s
only describable now then maybe you can. 
Describable by whom? Great unanswered Q—we don’t want to think of patent
prosecutors as co-inventors, but it’s a fact.
 
Other patent puzzles: if fully describable at the language
of the time, is it then obvious?
 
Inventions are emerging knowledge, and thus plain meaning
will be contestable, lacking the clarity its advocates hope for it.  The word describable is new in Festo but the
older cases use the concept—the emergent nature, esp. of true breakthroughs—language
only catches up. Thus the idea of the essential nature of an invention
survives, even though it’s an echo of central claiming that died long ago and
even though it’s anathema to plain meaning advocates.
 
Suzanne Michel, Sr. Patent Counsel, Google
 
Wasteful litigation boom. 
Lack of clear thinking about claim construction is an important reason
for lack of clear patent boundaries. 
True, fencelike boundaries can’t be achieved when describing something
that’s new. But it’s still a useful analogy/talking point/goal even if we can
never get to that shining beacon—can still consider whether we’re improving or
not improving.  Points out the
shortcomings of the term “IP,” a boon for patent maximalists.
 
Judges make decisions for reasons they’re not fully
examining in claim construction. 
Unpacking methods will improve decisions. One frustration is the pablum
that judges just apply the law, not make policy—that isn’t and can’t be
true.  Plain meaning judges will often
limit claims only if there’s a clear disavowal, which means that Philips didn’t
change what it was supposed to.
 
Would focus on the context of the patent document. Often in
litigation the words the case turns on is not one that has meaning in the art—“sandwich”
in an electronics patent; so you have to lean on the specification.  Also relates to proportionality/patent
bargaining: right should be commensurate with what you have given to the public,
what is described in the specification.
 
In some cases interpreting a patent narrowly to sustain it
is a better idea than broadly then arguing over invalidity.  When a patent is interpreted broadly and the
only defense remaining is invalidity, people are coerced into settling.  Disclaimer approach (only limiting the scope
when there’s a clear disclaimer) penalizes patentees who clearly describe their
inventions.  People who have a patent for
a fax machine then claim the internet infringes are a huge problem. 
 
Keith Hylton – Patent Uncertainty: Toward a Framework with Applications
 
Uncertainty has dynamic and static elements (uncertainty in
determining boundaries of property 
right).  Sources of static uncertainty
include: (1) statistical artifacts from the sample of cases you look at. (2)  Inherent uncertainty, as Radin
discussed.  (3) Strategic uncertainty:
people gaming the system to use it to their advantage.  Static/dynamic balance is why increasing
scope doesn’t always increase innovation: optimal scope (which applies to all
property rights).
 
Statistical artifact uncertainty: Oversampling, as you
oversample the bad drivers you encounter on the road.  Explosion of litigation costs in patent—timed
to software patents.  Alice produced a sharp drop in patent
litigation—at least 1/3 and maybe more. 
Recent uptick in 2015, but not enough to take it back up to previous
levels.  Suggests that knock-on effect of
Alice was reducing this observation
of uncertainty. 
 
Another feature of software patents: asymmetric information
probably less of a problem than with things like medical malpractice. 
 
Inherent uncertainty: Courts start from maximal uncertainty about
a case and try to work towards an optimal rule—this uncertainty is unavoidable.
 
Strategic uncertainty: deliberate use of vagueness to
increase economic value of patent/expand its boundaries.  Four categories of uncertainty w/in strategic
uncertainty.  First, inherent level of
abstraction in the patent + notice.  Are
you truly trying to tell people about the boundaries of this patent?  Abstraction: what applications, known and
unknown, does this patent cover? 
Abstraction can coexist with notice—they are separate in that I could patent
the quadratic formula and then there’d be notice but lots of abstract uses.  Bilski:
people know what hedging in the energy markets is and they know what a computer
is so they know when they’ve implicated the Bilski
patent. Abstract w/o notice is the most troubling quadrant (remaining: not
abstract + notice; not abstract + no notice).
 
Algorithmic patents should just be unavailable/ineligible.
But other software patents are worth worrying about.  Rowe
patent: detects driver impairment.  We
want that innovation incentivized in that space, so Alice shouldn’t be quick to kick out those kinds of innovations.
 
Benjamin Roin: Policy levers—blunt tools are hard to think
about b/c there’s so much going on at the theoretical and empirical
levels.  Some qualms about use of terms
static/dynamic—in some sense static uncertainty about what a claim covers is
always dynamic b/c you don’t know what tech will arise.  It’s clear that abstraction and notice aren’t
the same thing.  Roin suggests: also considering
patents as necessary incentives for underlying invention—that’s actually
distinct from notice and abstraction. 
Probably relates to R&D costs, market, uncertainty, cost of capital,
cost of imitation.  If we want to get rid
of chunks of patents, incentives should be part of that analysis.  Driver safety software: significant premakret
safety testing, long time to market, need for licensing to big auto, need to
create the market—they may or may not need a patent. 
 
Benefits of uncertainty: Incentive benefits of patents are highest
when blocking copycat imitation and “fast followers.” Practitioner literature
emphasizes difficulty foreseeing & drafting claims to block all design
arounds.  “Ease of designing around” is
most common reason patents are seen as ineffective in industry surveys.  Rules v. standards: vague(r) claim language
helps or could help block mere design-arounds. 
In tax rules, precision makes evasion easier.  Dissidents in USSR wanted clear standards so
they could avoid censorship; censors refused so they could punish them after
the fact. 
 
Notice to whom? 
Potential infringers w/advance notice are more likely to avoid liability
by designing around the claims. Copycats and fast follwers are probably most
likely to have notice of the patent. Are we getting the worst of both worlds?
Maybe we give sufficient notice & certainty to allow them to design around,
undercutting main beneficial incentive effects; while giving insufficient
notice and certainty to more substantive follow-on innovators (particularly
ones in complex downstream product markets and ones in more distant tech/market
spaces), exacerbating the system’s main adverse incentive effects.
 
Stan Liebowitz – The Benefits of Unbundling Copyright from
Patent in Economic Analyses
 
© and patent are often lumped together in discussions,
including discussions about notice, but they differ in important ways, leading
to analytical errors when they are lumped together.  [Liebowitz thinks that it is easy to tell
when you have infringed copyright because, except in unconscious copying cases,
you know when you’ve copied and thus it’s easy to avoid, unlike patent
infringement which does not require copying. 
This entirely ignores idea/expression difficulties and his own discussion
of genre and how no copyright owner can own an entire genre even if she creates
it.  By definition, creators who
participate in the genre know of the existence of the founder, and their
question is how close they can go.]
 
Notice costs are resources used to impart ownership
information.  The idea that
IP/intangibles have higher notice costs than tangible goods. This may be true
for patented goods; less likely to be true for copyrighted goods. 
 
Simplifications: creators of new works try to avoid
infringing previously created works or wish to get permissions.  This is the forward-looking view.  I will assume © lasts forever with no
limitations on ownership rights, which eliminates the need to examine the costs
of dealing with restricted ownership, such as fair use or compulsory
licensing.  [So, assuming a can opener, ©
would be different from patent?  And yet
it’s still not true b/c of idea/expression.] 
If you don’t copy from someone else, it’s ok.  If you never saw the first work, it doesn’t
matter if the second looks like it.  [The
other important thing he has assumed away is any difference between “never saw”
and “never copied,” which is idea/expression. 
And yet successful works are seen and heard by millions, because that’s
how they have value.]  It’s perfectly
fine for the Beatles to write “Back in the USSR” to josh about the Beach Boys’ “California
Girls” b/c all they took is the idea, so they don’t have to worry about notice
costs. There are no notice costs as long as people are only creating new stuff.
 This is possible in © but not in patent
or real property.  [It’s distressing to
me that he doesn’t notice the contradiction inherent in his story of the
Beatles creating as a but-for consequence of the Beach Boys.] 
 
Of course, this isn’t the real world.  There are copiers out there, and that
produces notice costs for permission, evasion, or application of exceptions.  Costs are higher b/c copiers want to avoid
payment by checking on whether works are in © (or limits apply)—duration imposes
extra notice costs.  Fair use imposes
extra costs, but these are not notice costs b/c neither the owner nor the
copier can tell another whether a use is fair use.  That’s a cost, but he doesn’t want to call it
a notice cost b/c it comes from the legal system and not from a claimant
thereunder.  We have decided to bear the
costs of having fair use.
 
Bottom line: copyright has lower notice costs than other
properties for works created de novo, at least when people know when they’re
copying. Guesses that majority of works that have market value are works of
this type.  Thus, patent notice costs are
likely to be higher.
 
Wendy Gordon: Key point: he reminds us that if we’re not
copying, we don’t need to worry about copyright, in the abstract. In the
concrete, given the ubiquity of works, you can be forced to prove you didn’t
copy b/c access will be possible.  The
practical issues arise, though perhaps not to the extent as in patent. Favorite
example: Spider Robinson’s sf story, Melancholy Elephants—if we knew our
borrowings all the time we’d always infringe; we need the ability to forget.
 
Notion, adopted as a matter of mere convenience, of inherent
copyright (that lasts forever with no holes)—it’s inherently contradictory.  If a copyright were completely owned, then
its ideas would also be owned. A classic ambiguity—and you’re trying to rule
out ambiguity—is idea/expression. We also recognize indirect liability: if I
copy Stacey & she copied Fred, Stacey’s grant of permission to me doesn’t
help my violation of Fred’s rights.  
 
If your hypothesis is that everything the creator did was
new, you have the paradox of human creation—language is not new.  You are always building on the foundations
built by others.  There is no such thing
as inherent copyright.
 
Patent too often takes for granted that independent
inventors, if they come/file later, are guilty of infringement. This gives rise
to trolling/submarine problems.  Arguing
that patents shouldn’t have a defense for independent inventions because that
would be inefficient requires some heroic assumptions.  She’s never been persuaded that simultaneous
invention justifies the absence of an independent inventor defense; also seems
inconsistent w/ human rights entitlement to the fruits of one’s own labor.  Winner-take-all seems unjustified.
 
Lemley: for Radin: Agrees w/approach and suggestion that
plain meaning won’t bring clarity. Take your argument to its logical
conclusion, and it’s not obvious that adding more words on top of the claim
gets us any further.  Claim construction
= lawyers fight about meaning of claim construction.  19th century model: would we be
better off w/central claiming and what the patentee actually built, not what
the lawyer wrote?
 
Radin: sympathetic to that—we do that sub rosa.  Causes judges sometimes to construe “plain
meaning” broadly.  Thinks we always have
both.
 
Menell: pragmatic issues around Markman hearings are so strong—dealing with judges not trained in
these areas—you need assistance finding the essence of an invention. © also
needs a Markman process trying to
delineate what the uncopyrightable elements of the work are for the jury. That’s
an important part of the translation. 
 
For Roin: suggests benefits of uncertainty, but you can’t
have a public system of property rights w/o a serious public disclosure of
boundaries.  Left w/trade secret if you
don’t want that.
 
Roin: It’s a rule v. standard thing—ex ante v. ex post.  (So I take it that central claiming could
address some of his issues?)
 
Q: when you have a patent, you have multiple claims, not
just one claim.  The life of a patent isn’t
over during the span it’s in effect.  You
can cross-license with an improver.  You
can use continuations to extend its life.
 
Radin for Michel: Michel suggested that boundaries were a
good analogy/aspiration, but Radin thinks it can be a misleading one.  We still have lots of agreement about what
judges are doing.
 
Chiang: You can’t capture the policy goal of complete
definition with language. But if you want a rule w/ a result that’s clear one
way or another in a particular case, then you can provide notice/plain meaning—everyone
can predict the result ahead of time. 
Radin claims that the fact that judges purport to apply plain meaning
doesn’t show such a thing exists, and he agrees. But the fact that they disagree
on what the plain meaning is also doesn’t show there is no such thing as plain
meaning.  You have to add in dishonesty
[Radin clarifies: not in the sense of lying, but in the sense of having
intuitions that are not fully explained].
 
Radin: we can get many easy cases, but when there’s a lot of
money that matters we won’t get help from plain meaning.
 
Chiang: but as a philosophical claim that plain meaning
doesn’t exist, it’s a problem that your claim only covers hard cases, not easy
cases.

Radin: sure there is plain meaning when we all agree, but that’s not b/c of
inherent meaning but rather b/c we all agree.
 
Henry Smith: can agree that plain meaning doesn’t exist in
practice/hard cases but still not think it necessarily matters.  You could think language is indeterminate,
and nonetheless formalism/contextualism depends on the nature of the system. We
have different varieties of English, some more and less formal.  There’s a dividing line about what we should
care about. The plain meaning folks are saying “in this context, we need only
so much information, not more, to do what we want done”—that’s a pragmatic
judgment. Philosophy of ideal points doesn’t tell us much about that.

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Notice and Notice Failure at BU, panel 5

Posted on September 26, 2015 by rtushnet
Lydia Loren – Fixation as Notice in Copyright Law
 
3 different roles: (1) protectability; (2) infringement—reproduction
etc. require fixation; (3) preemption—no preemption for unfixed works.  What kind of a notice function might fixation
play in each area?
 
Statutory definition: fixed when its embodiment is
sufficiently permanent/stable to be perceived, reproduced etc. for a period of
more than transitory duration. Copies are material objects (other than
phonorecords) in which a work is fixed by any method now known/later
developed. 
 
Protectability: Early cases: AV works can be fixed in
software.  Recently: Kelly v. Chicago
Park District, wildflower garden wasn’t fixed/copyrightable.  Garcia v. Google: performer didn’t fix
performance under her authority.  Kelly says: “the law must have some
limits”—authorship is a concern as well as fixation.  The real barrier to fixation is essential,
not temporal—the garden may continue season to season but its nature is dynamic
change.  Garcia: the creator of the film fixed the performance; Garcia
played no role in the fixation.
 
Infringement cases are about digital copies.  MAI gives
us RAM copies as physical embodiments, but Cablevision
says there’s a duration requirement and partial, constantly overwritten (after
seconds) buffer copies don’t qualify.
 
What is this really about? 
Decisions reflect underlying instinct about a type of notice: crossing
boundaries into something eligible for copyright protection/remaining in
state-law eligible area.  Entering into
something that qualifies for a type of infringement liability. Tangibility and
its relationship to markets.  Fixation
demonstrates intent to exploit the work in the market: either the market for a
single copy or the market for copies. 
Laura Heymann made this argument a while back: what kinds of works are
worth protecting, can be engaged w/as commodities rather than experiences—by a
person who is more consumer than audience. A work that is not a thing has
difficulty becoming an article of commerce. 
Infringement: sufficiently stable to interfere w/markets.
 
If fixation is notice, the audience for the notice that’s
relevant in copyrightability is the author: you’ve now created a thing.  When it’s an encounter w/a fixed work
(infringement), the authorship in that fixed work may be protected, the audience
is others.  Says nothing about the scope
of copyright, just about the potential/something in the contents of the fixed
work is or may be copyrightable. 
Copyright owner also gets notice that someone might have created
something that interferes w/their market. 
Both copyrightability and infringement have limits.
 
One should not take infringement fixation cases to talk
about copyrightability fixation cases. 
Even in the legis. history, Congress discusses White-Smith v. Apollo, an
infringement case rather than copyrightability in its discussion of
mistakes.  In copyrightability, we are
ill served by a focus on durational permanence of minutes v. seconds.  Sand castles built below the high tide line;
ice sculptures in hot places.  Authorial
intent of creation of an exploitable copy should matter, which affects our
analysis of bridal bouquets and tweets. 
We should use our instincts to say that digital ephemera isn’t fixed
enough—it’s a RAM copy, but still not eligible.
 
Fred Von Lohmann, Google: Notice to whom? In many of the papers
there is an issue of audience. Loren suggests that fixation is notice to
creators, notice to users, and perhaps notice to lawmakers/courts.  Garcia
makes real the feature of fixation as focusing creators on a single moment in
which we can determine who is the author. 
At least that gives us a time to pay attention to—not the 3 months in
the studio before that, or the idea a year before.
 
Unfixed infringements? Why do we think a derivative work can
be infringing without fixation? Why do we allow unfixed public performances to
be infringing? [Tony Reese has eloquently explained why you shouldn’t be able
to combine derivative work + public performance right in this way, though
unfixed public performances can be infringements of an original work.] 
 
Sufficiently stable to be exploited: does that work?  Has that ever worked?  Vine, Periscope, other new live streaming
tech.  The organizers of a boxing match
didn’t think they were organizing an event too evanescent to be exploited.  If fixation was intended to be a marker of
that which had market value and that which didn’t, how do we deal with tech
eroding the line.  Performances as things
for which the door was adequate protection: you charged audiences to attend.  That’s not new—the rest of the fixation
definition has the NFL clause, allowing © in broadcast of live events where
there is a simultaneous fixation.
 
Other attack: nonpersistent copies: what do we do about
copies that are brief, but create value—machine learning; Shazam app that can
ID music—lots of reproductions, briefly, to extract metadata.  Have already seen legal friction along that
frontier. What’s too evanescent to be exploited?  European approach in InfoSoc directive:
introduce a concept of “no independent
economic significance.”  Moved focus away
from formal Q of fixation towards a more market-oriented definition. 
 
If we think fixation is so important, is there some limit on
when it can be cast aside? This goes to the preemption question.  There is an exit opportunity for lawmakers: they
can go to the Commerce Clause to evade the Copyright Clause; states can
legislate on unfixed works.  What does it
mean if lawmakers can treat fixation as optional?  Does that mean that fixation has to be part
of a bargain that lawmakers make?
 
Peter Menell – Economic Analysis of Copyright Notice
 
In land, notice is a magic bullet: inform people in advance
of rights and boundaries—a really good focal point for notice generally. Land
is geographically unique, can be physically inspected and marked.  Recordation—reinforced by tax rules etc.  Controlled boundaries: you know what acts
will interfere w/it.  You typically can
preclear whatever problems you might encounter—real estate developers don’t put
much at risk of expropriation b/c they get the zoning board to back this
up.  Wasn’t always so perfect, but nearly
so.  [Except for mortgage securitization
and Ibanez problems which most of us
have agreed to ignore, because banks must own something.]
 
Copyright and real estate are different b/c of building and
borrowing as key feature of creativity. Notice deals w/discrete issues: (1)
tracing—what governs a work you might interact w/; (2) scope—where are the
things in a protectable work that you are free to use, such as
ideas/tropes/facts?
 
Tracing: consider “Happy Birthday to You.” There isn’t a
geographically unique resource but multiple copies; marking is optional and
would be done at earlier time, with possibly unknown changes; recording isn’t
required; even if it was still valid, there are unprotected regions within
boundaries; no effective preclearance institutions such as opinion letter from
Copyright Office.
 
Tracing: there is a magic bullet solution.  Today we have tech that is capable of doing
this on a massive scale.  You can scan
images that aren’t even that close and find them.  We now have a perfect magic bullet system in
Content ID.  (!)  If we rewrote the Copyright Act today, we
could use this system.  What you’re
marking w/these technologies is the work itself, and there’s nothing preventing
everyone from digitizing & enabling everyone else to find the work. Voids
all problems of geographic/int’l disparity. 
Unique global identifier: a concept that exists in computer science.  Failure to mark could limit remedies.
 
Digital ID safe harbor act: propose that © owners should be
encouraged to make a digital deposit, in which works are archived into a
searchable public archive.  Cumulative
creators can search via contentID.  If no
match, then no statutory damages available.

Scope would remain a problem; there is no magic bullet: the New Yorker New Yorker’s
eye view of the world versus the Moscow on the Hudson poster.  Grateful Dead case in which reproducting posters
is fair use when used for historical value and not expressive value.  When judge learned that Bill Graham Archives
was being abusive in its demands, concluded it was fair use.  Why not have algorithms decide this too?
 
We should have up-front insurance.  Registry/quiet title, with preclearance
institutions. Promote bargaining through licensing. One problem is that no one
has to respond when a license is requested. A good citizen should have to respond.  If someone makes you a reasonable offer and
you don’t respond—you should pay atty fees if you later sue.  PROs like ASCAP and ContentID are
helping.  The solution doesn’t have to be
perfect.  Compulsory licensing would also
be good.
 
Substantive law: fair use—judges are better at saying “play nice”
than trying to figure out the four factors. (RT: Who decides niceness? When it
comes to whether someone who is not in a position of power has been “playing
nicely” with a powerful person’s work or even just negotiating in good faith, I
am reminded of Dale Spender’s observation: “The talkativeness of women has been
gauged in comparison not with men but with silence. Women have not been judged
on the grounds of whether they talk more than men, but of whether they talk
more than silent women.”  Look at what
happened to 2 Live Crew and Alice Randall in the lower courts, for example.)  
 
Remedies: Injunctive relief should be limited to exact
copies—law is moving in that direction anyway. 
Don’t shut down a billion dollar brand because it may have started w/two
misappropriated names, as Kozinski said in Mattel v. MGA.  No disgorgement if someone has altered the
work, v. piracy—just fair monetary. Statutory damages should also be limited to
piracy.  (Is Bill Graham Archives an
example of piracy? They were selling the posters, along with a package of other
information?)
 
Wendy Gordon: much is plausible and convincing, esp. on
tracing v. scope.  Intuitive reactions
aren’t necessarily wrong. When you’re dealing w/ a question that can’t be
solved with notice, like scope, then trying to make notice externalities less
destructive by changing the remedies makes sense.  But digital watermarking doesn’t convince,
b/c she suggests that would disqualify the unsearchable.  Orphan works problem: a lot of the time it’s
the kind of ephemera that would never be watermarked now.  Buying into a larger question if you imagine
making watermarking mandatory would solve notice problems.  Need for a new device to protect certain
kinds of privacy (I was thinking about revenge porn as he was talking but
Gordon has identified many other elements of the problem).
 
Transaction costs are meaningless in the abstract; must always
be judged by the value of the transaction. 
5 minutes to ask for permission may be significant if it gives you only
a moment’s pleasure.  When you use real
estate as an analogy, you’re dealing with something that has high value in many
senses, including long term economic value. A dangerous model for ©, which
serves many goals for people often producing things of little commercial
value.  Recording requirements may be
excellent for a land parcel, but not for the ephemera that make up orphan works
or diaries.
 
Oren Bracha – Copyright Accidents (coauthored with Patrick
Goold)
 
Judge Young said: It’s your duty and right as academics to
pursue the ideas you think are right, even if they aren’t yet supported by
judges and legislatures.
 
Copyright accidents: e.g., using an old photo in a
documentary; using publicly licensed code “tainted” by proprietary code;
including an “orphan” book in a digitization project. Should they be treated
differently than any other infringement? 
 
All of them ex ante are risks, which only materialize ex
post.  In other areas, we tend to treat
such cases differently than cases involving more than ex ante risk, such as certainty
of transgressing on some protected interest. 
[Aren’t examples one and three examples of certainty of transgressing,
with uncertainty about whether the owner of the interest cares in the slightest
or even knows they are the owner?  As
Henry Smith has said, you don’t need to know who owns the car you encounter on
the street to know it’s not your car; but here the object you encounter is unlikely
to be as valuable as a car.] Standard answer in ©: strict liability (though
this hasn’t always been so). 
 
In tort cases, we often consider the ability to
bargain/ability to solve the problem through markets instead of the law when
parties impose risks on each other.  Market
won’t take care of © problems because the boundaries of the rights are elusive;
the legal status of the work is uncertain; the owner’s work is unknown and
preferences uncertain; the owner’s identity may itself be unknown. These are
issues of notice failure.  Bracketing in
this paper the issue of legal uncertainty (is this fair use or not?).
 
The problem is one of reciprocal nature: Coase, The Problem
of Social Cost.  If it’s a bilateral
conduct issue, then look for cost effective prevention.  As would-be infringer: People can invest in
search to find the owner, the copyright status, etc.  Or you could not create what you’re making,
avoiding the risk entirely. But there are also many things © owners can do to
decrease risks of accidents: registering ©, recording transfers, affixing
notice.  Registering w/Content ID.  If user offers well-publicized opt-out, then
use it.  Going after a third party if the
third party is enabling lots of such uses. Strict liability gives optimal
incentives to injurer to invest in prevention; but it doesn’t give any
incentives to the victim/owner to invest in prevention.  Negligence gives them both optimal
incentives.
 
What to do? If there is perfect Content ID, then we have
perfect external means to solve the problem and don’t need to worry.  But he doubts this will happen any time
soon.  A negligence element in the prima
facie case?  Negligence proxy rules?
Incorporate into fair use?
 
Fred Yen: Not all of these are really accidents. One can
come across an orphan work, such as a digital photo (clearly taken after 1978)—hard
to call going ahead and using it even after reasonable attempts to find the
owner “accidental” infringement.  You don’t
know if the owner will discover it/care, but not an accident. 
 
Legal accidents and negligence is a complicated topic, which
Bracha doesn’t purport to address, but the line between fact and law is itself
unclear: the D may think she’s only borrowing the facts but find out she’s
taking protectable expression, or vice versa. 
Sometimes these are treated as factual questions.
 
But it’s not always the case in tort cases that a defendant
is allowed to rely on efforts of employee to avoid accidents—often true
w/publishers dealing w/authors; publishers have staff and expertise.  Negligence might not let them evade
liability.
 
Fault: there’s a reason we often start teaching torts
w/intentional torts—there is an intuitive understanding.  It’s the later torts that get hard v. walking
up and punching a person in the nose. 
When we discuss the object of intent that can give rise to a battery, we
ask what does the plaintiff reasonably find offensive: a punch in the nose,
which everyone understand. What would be the analog in ©—full copying?  What about a not-well-known acquaintance
giving me a hug—is that reasonably offensive? 
Might be equivalent of copying a few pages for use in class.  Incidental bump on the subway?  Might be similar to ephemeral use.
 
There are various forms of intent courts sometimes accept as
dividing line between faulty and not faulty: intentional touch (intent to copy
p’s work); intent to touch in a way a reasonable person would find harmful or
offensive, regardless of subjective intent (Nation’s publication of quotes from
Ford’s memoir before the memoir was publication); intent to touch in a way D
subjectively understands P will find offensive (piracy).  Maybe a publisher who genuinely believes
there’s no unlicensed material used in a book simply lacks intent to
touch/copy.  Time-shifting: maybe P
thinks it’s offensive but we understand why individual people wouldn’t
agree/understand.  Posting an entire
short poem on a website to express your own thoughts—is that subjectively ok
even if we understand why a reasonable person would be offended?
 
Privilege: in a torts model, you’d encounter public
necessity and private necessity. These also come into our intuitions.  Transformative value/fair use.  Public necessity, we don’t ask you to pay;
private necessity: you do have to pay for the damage you cause—Texaco or maybe even orphan works.
 
Gordon: what you’re describing wouldn’t be treated as
negligence in the common law.  If I do a
good faith search and make a factual determination about the boundaries of my
land, if I’m wrong I’m still a trespasser. 
I will have to disgorge profit I make. 
There’s lots of historical questions about why a good faith belief in
erroneous facts should trigger trespass liability, but that’s the pattern.
 
You assume strict liability means there will be no
internalization of precautions, b/c P can always sue, but everything’s
reciprocal. If a class of people isn’t liable, they might nonetheless be bribed
by the other side (consumers willing to pay more for a safer product)—even after
strict liability consumers may be willing to pay more for safety they won’t
have to sue over, despite their legal entitlements.

Orly Lobel: Agency letter—safe haven if you tried but made missteps?  Computerized ways of dealing w/some issues—could
we have tech of crowdsourcing to do the analysis? Ratings and reviews?
 
Menell: Perceived by many as property rights; I think of
them more as regulatory and I’d like © to be seen as capable of admin
adjustment and fine-tuning. DMCA anti-circumvention safe harbors is done in
regulatory setting. B/c we never have perfect scope knowledge, we should have
these other types of adjustments. 
Crowdsourcing—trying to estimate what a jury would do after litigation;
no more acceptable to © owners.  Agency
might work better, but can’t be perfectly solved.
 
RT: Q for Loren: tell me why this distinction between
fixation analyses depending on whether copyrightability or infringement is at
issue is ok w/the statutory language. 
And are either of them fit for use in preemption? 
 
Loren: other examples where terms turn out to mean different
things in different context—willfulness for statutory damages/criminal
liability; derivative works for protectability/infringement.  Doesn’t like that but might be something
worth living with.
 
RT: Q for Menell: What is the basis for the claim that
Content ID is perfect?  Matching problems
in part b/c as we heard yesterday from Viacom’s GC they fear deliberate attempts
to evade (not open and notorious use) so the algorithm is not written in the
way you want what you are calling Content ID to be written.  This is evident already in the example you
show: two different recordings being identified as the same despite visually
apparent differences; they were clearly broadcast on different channels with
different additional materials and it’s quite possible that the claimant only
has a claim in the chyron despite using the rest of the image to create the
digital fingerprint to identify what it is that they have a claim to; separately,
there are ownership claiming problems, where the existence of “orphans” creates
a massive squatter problem—like fake liens filed by right-wing citizens.
 
Menell: [the initial burden would be on the would-be user:] anyone
who wants to be part of system would deposit stuff into the database. People
could run scans against this. That would tell you whether any matches occur.  Doesn’t solve tracing problems.  At least if you’re Ken Burns you get some
data.  Maybe we need separate protection
for private materials. Anyone who wants to put materials out into the world has
to register those works.  If you didn’t
also go into a very low cost registration option, others would be able to
use.  Clear out a lot of tracing
problems.  (And create them when trolls
register zillions of photos they find online that they think won’t be
registered by anyone else … as Gordon says, this isn’t land.)
 
Von Lohmann: When I hear tort, I think insurance.  Many of these solutions come back to “fix
statutory damages.”  If this is really a
problem of statutory damages, aren’t these solutions only solutions in the
margins?  The first-order problem is
really remedies.
 
Bracha: still the Q of who should get insurance, the
plaintiff or the defendant?  But yes, remedies
are a huge part of the problem. 
 
Q: why not apply Bracha’s analysis to patent as well?
 
Bracha: there is some writing in this vein.  Trespass in patent might be different.
 
Gordon: though trespass does operate where the trespasser
has done everything he can but was wrong.
 
Henry Smith: the temptation is to load more things into the
recording system.  Liens, easements, etc.
What about people who want to add in limited permissions.  Raises a contractual boilerplate problem—touch
and concern is the policing device in land. But once you’ve got something for
tracing people will want to load on all this additional info.  (Carol Rose’s fabulous Crystals and Mud in Property Law talks about this overloading and the effects on notice/predictability.)
 
Menell: content ID is a bit like that—allows people to
specify CC, etc.  (Hunh?  Allows you to specify whether YouTube will
run ads, whether claimant will allow others to monetize their channels if they
use Content ID’d chunks, but I am not aware it supports CC.) We’ve reached a
tech stage where we’re capable of making the work itself the way of solving
notice. No longer geographically/tied to a specific copy. Then you layer
responsibilities onto it—e.g., you have to maintain contact info.  Would we want maintenance fees? 
 
Gordon: why do you think the magic bullet will work?  How do I determine whether a painting
infringes another painting—it’s only the digital versions that can be traced
and many infringements aren’t digital.
 
Menell: can do it for music; digitization is getting
better.  Architectural works: architect
will have to submit photo. But mostly people are suing over AV works and
music.  But if we were sitting down
w/technologists, we could say it’s not going to be that hard a problem.  (See xkcd on
this issue.)  Easy to add photos,
text, film—99% of what’s commercially significant.
 
Jane Ginsburg: Fixation performs the notice function of
letting everyone know what the work is. 
But you may have conflated the work with the fixation.  The fixation tells us what the work is.  But for the sand castle, ice sculpture: those
are works. They happen to be incorporeal. 
The tide washing away/sun melting doesn’t take them out of copyright b/c
they’ve been fixed in a tangible medium of expression through photographs,
which prove they’re perceptible for more than transitory duration. Once we know
that the work exists, that’s enough even if the original instantiation
disappears.
 
Loren: sure, photo can fix. But what’s a transitory
duration?  Courts are saying that
perception isn’t the only requirement. There’s a durational component.

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