IPSC: Other IP

Posted on August 6, 2015 by rtushnet
Other IP  [Insert wry commentary about “fringe” fields like advertising law]
 
Sarah Burstein, The University of Oklahoma College of Law
Reviving Ornamentality 
 
Fed. Cir. killed the doctrine.  Statute says new, original, and ornamental
designs can get a design patent—word has been in the statute from the
start.  What now gets a design patent
does not necessarily fit with assumptions: design patent for a “cage spinal
implant.”  Or a “connector,” where the
only claim is the interface with other parts of the connector to a
computer.  Fuzzy slipper (no infringement
but valid). 
 
Is the PTO asleep at the wheel? No, the problem is the Fed.
Cir.  Regional circuits tended to have “dictated
by function” as floor + something more—beauty, visual appeal.  Fed. Cir. has destroyed that.  (1) Ornamental is the opposite of
functional.  (2) Thus ask whether design
is primarily ornamental or primarily functional.  (3) Won’t choose the latter unless there are
no (good) alternatives.  Clearly wrong:
ornamental is not the opposite of functional. 
A cup handle in the shape of a dragon can be both functional and ornamental.  They’re just different aspects.
 
And it’s not just about channeling.  Should the trade dress functionality
requirement be the same as for design patent? 
Apple v. Samsung: we use the same word for very different concepts, and
should differentiate them further. In trade dress we want to protect real
utility patents; don’t want useful design locked up. That’s part of
ornamentality, but not all.  Some say the
only good reason not to grant a design patent is to protect the utility patent
system.  Rethink ornamentality.
 
The whole concept: make this the visual part, the
unique/signature requirement of design patent; doesn’t appear in any other
regime of law.  Material visual
contribution to the art, using whatever aesthetic you want—has to be plausible
that consumers would care. Traditional decorative arts = presumptively
material.  Fed. Cir. allowed the spinal
implant to be patented b/c the doctor would see it.  But the doctor has no reason to care.
 
RT: Really like the project. (1) If ornamental isn’t the
opposite of functional, then where is the statutory basis for excluding functional
designs from design patent?  (2) Why
shouldn’t the utilitarian functionality standard be at least as broad in design
patent as in TM?  Is your standard for
patentability a requirement of
aesthetic functionality? (Which might itself help serve a channeling function
away from TM.)
 
A: (2) It sort of is. 
That is what design patents are for. 
(1) Ornamentality takes care of that. You have to care about it because
of how it looks, not because of how it works.
 
Q: is it necessary to jettison the utilitarian component as
much?  While the connector if functional,
it also looks sleek and cool.  You buy
the system because it all looks cool.
 
A: but it doesn’t have to be.  Apple wants it that way, but that’s a key
issue with spare parts.
 
Q: Two formulations: one where the consumer is motivated to
purchase, v. one where “do consumers care?” 
The former wipes out a lot of elements that might be important—a Mercedes
key looks really cool, as part of the whole design of the car.
 
Lisa Ramsey: Line drawing: who do we ask?  Industrial designers?  End consumers? 
 
Betsy Rosenblatt: Entire market value rule in patent asks a
similar Q, why do people buy.  Ends up
being very difficult to draw these lines—probably equally difficult in yours.
 
Q: wouldn’t this be redundant w/©, given the history of the
relationship between the two? One of the reasons for design patent’s desuetude
might be the expansion of ©.  Doesn’t
seem like they became popular again until Fed. Cir. enabled them to do
something with them that they couldn’t do with ©.
 
A: it’s not good that you can go under ©’s low bar.
 
Q: British case, Henshire v. ?, 10-12 judges talked about
what they saw as artistic craftsmanship. 
That was something that developed as a © category, in the background of
Ruskin’s philosophy of art. Unworkable, but you still have design protection,
to fill the gray area of functionality and aesthetics.
 
RT: Materiality jurisprudence can fix your problem of
linedrawing!  Materiality is willing to
judge based on wholesale ideas—this is the kind
of thing that sells products of this type—rather than difficult individualized
determinations.
 
Q: is there a difference between lock-in—things you have to
buy—and not.  Also difficulty of
competing without copying—costs of designing around.  “Material” in patent context immediately
brings to mind inequitable conduct, and that’s a sticky idea for patent
lawyers.
 
Q: Bleistein says
you don’t have to make aesthetic judgments when looking at things that are
inherently aesthetic, and you seem to agree, but I think that’s
difficult/impossible. An aesthetic failure is an aesthetic move.
 
Yolanda King, Northern Illinois University College of Law
The Inadvisability of Nonuniformity in the Licensing of
Cover Songs 
 
Copyright Office recommends change in 115(a)(2): compulsory
license includes ability to make arrangement to conform it to style of
performer but can’t change fundamental nature or melody and isn’t copyrightable
as a derivative work w/o consent of copyright owner.  Much criticism of this, but CO recommends
that licensing of cover songs in various formats be changed.  Physical format = subject to §115.  But if you’re going to create a cover and
disseminate it in digital format—download, streaming—then it shouldn’t be
subject to §115. 
 
Her piece analyzes the recommendations.  Most of the report is about harmonization,
including in the music licensing marketplace, e.g., general public performance
right for sound recordings. Here, they’re treating uses differently—disharmonization.  Change in music consumption: physical formats
are predicted to disappear.  Which means
digital uses will take over, not subject to compulsory licensing. Very strange
recommendation; why not just do away with compulsory licensing if compulsory licensing
is so bad?  Burden on creators: most
creators of cover songs will be distributed digitally. 
 
Why would the CO do this?
 
Q: this sounds like politics, not logic. Want to know who
was doing the lobbying.  May be available
information.  (FOIA?) [But this doesn’t
make as much sense as dividing terrestrial from digital radio, because almost
everybody who makes physical records also sells them digitally.]
 
Q: sounds like a foot in the door—first you get digital,
then you argue that digital only is unfair.
 
Q: huge potential deadweight losses in speech, b/c musical ©
owners want to extract rent; opportunity to get rents out of people who currently
aren’t paying—people have been relying on that right for 100 years. 
 
A: Prince is an example: Prince would never license covers.  Unlike the rest of the report, which includes
support and discussion, this change is proposed without much
explanation/citation.
 
Rosenblatt: Some artists are deeply offended by the cover
right.  That lobby is very loud in the
conversation.  Look not just at
ASCAP/Harry Fox but Tresonas of the world: seeks out high school show choirs
& tells them to pay for custom arrangements.
 
Mira Sundara Rajan University of Glasgow – CREATe
Of Murals and Morals: Recent Art Controversies and What They
Signify for the Visual Artists Rights Act (VARA) of 1990 
 
Nearing maturity—what’s happened?  Works themselves: artworks/cultural property
represent a key interest. 
Artists/creators have separate interests.  Owners of artworks; property owners—owners of
buildings where artworks are situated. 
The public as a separate interest holding group.
 
Required to implement Berne Convention.  Protection of artists is weak compared to
other countries.  But also strong in some
respects.  Strong preservation of
artworks. 
 
What’s special about VARA? Destruction is generally
prohibited, which is actually controversial in moral rights generally. Money
damages play an important role and can be large: compensate the artists;
compensate the public/cultural heritage loss. 
Confusion about how to balance artistic interests with private property
ownership.  Potential for radical action
in the public interest, drawing on the ancestral power of VARA.
 
Kent Twitchell, $1.1 million for painting over his Ed Ruscha
mural. Compare France, where in the Hugo case 1 Euro was awarded, as
symbol.  But can money damages adequately
compensate for the destruction of the work? 
5Pointz controversy: court clearly says that they can—a case involving
the “UN of Graffiti,” NY’s “Graffiti Mecca.” 
Painted over by many artists over time.
 
US law is almost unique in destruction prevention (India also
prohibits that) but requires works to be of recognized stature.  Amar Nath Sehgal v. Union of India (Delhi
H.C. 2005)—mural damaged when being taken down for move to another site.  Damage to work occurred in 1978—wheels of
justice grind slowly in India. Court: Moral rights exist in works of art if
they acquire the status of cultural heritage of a nation, given the various int’l
cultural property conventions India signed. 
 
5pointz: site as a whole is not an artwork; ephemeral nature
may be important.  “Recognized stature”:
under Carter v. Helmsley-Spear, must have (1) stature, (2) that is recognized
by experts, public, segment of society. Experts disagreed on requirements for
stature—public exposure; artist stature à work stature;
consensus.  Bottom line: not a “work” and
therefore stature didn’t matter; ephemeral nature of works argued against there
being recognition.  Artists have now sued
for destruction of their works—what a difference a day makes.  Ruling came out one day after the works had
been whitewashed.
 
Picasso work: case won in the court of public opinion; outside
VARA because of timeframe.  California
Art Preservation Act allows public intervention to protect art—allows action to
preserve cultural heritage.  Art
preservation rather than artist rights’ statute?
 
Mary LaFrance University of Nevada, Las Vegas, William S. Boyd
School of Law
False Advertising Claims Against Product Names and Labels 
 
Pom Wonderful: sued for having only a tiny bit of
pomegranate and blueberry juice in its 99.4% apple and grape juice “Pomegranate
Blueberry Juice” product.  SCt found no
FDA safe harbor.  (DCt found same for
USDA in 2008.)  So what makes a label
false or misleading for state law and for the Lanham Act?  Potential for a flood of litigation.
 
Competitors risk the glass houses problem: their own label
is vulnerable to challenge if they sue. 
Pom’s Pomegranate Blueberry—what does that imply about the
contents?  If they called it Blueberry
Pomegranate would they be at risk? 
Claims under state false advertising or deceptive trade practices
acts?  Consumers do have
standing/preemption question is unsettled. 
Consumers don’t worry about the glass houses problem.  Class action issues.
 
Deceptively misdescriptive marks can be registered—PTO may
have different perception of what is deceptive for registration versus false
advertising purposes.  Non-deceptive in
the abstract might be deceptive in context of label/ads. E.g., BREATHASURE.  Registered, but cancelled except for chewing
gum.  Also registered HEALTHASURE for
dietary supplements, which is still on the register.  Harder: health is so broad that perhaps this
is puffery.  Mylanta NIGHT TIME STRENGTH—unregistered;
found to be literally false. 
 
Gerber “Fruit Juice Snacks”—never even tried to register;
false advertising claim allowed by 9th Cir. Label said “nutritious,”
“made w/real fruit juice and other all natural ingredients,” which were corn
syrup and water. Package showed a variety of fruits, but only fruit juice was
white grape juice from conentrate. Consumers might have different meanings.
 
FROOT LOOPS held not to be deceptive—nobody seeing the
packaging would believe there was actual fruit.
 
Terms may have defined meanings under regs, but consumers
probably don’t know those meanings.  What
would consumers expect about Pomegranate Blueberry juice: 50/50? 85/15
(actual)?  15/85?  10% corn syrup?  What do consumers think? Expects a lot of
variation in reactions.  How would Juicy
Fruit fare if seeking registration today?

We don’t know what consumers think of the words: organic, natural, free range,
low fat/fat free/low carb, light/lite, zero trans fat (up to .5 mg/serving by
regs), cholesterol free (up to 2 mg/serving), low cholesterol (up to 20
mg/serving) , zero calories (up to 5 cal/serving), sugar free (up to .5
g/serving), healthy, nutritious, juice v. juice drink v. juice beverage; cane
juice.
 
Courts don’t always require survey evidence and sometimes
ignore survey evidence that was offered. When they believe they know what a
reasonable consumer would infer from a name/label/context.  Courts have not articulated factors or guidelines
for determining what a reasonable consumer infers, unlike the multifactor
likely confusion analysis. [I think that’s a good thing.]  Consumers may see different things.  [What is wrong with probabalistic
analysis?]  Courts do more gut-level analysis
in many situations. [Not clear that differs from TM; see Barton Beebe’s study.]
 
Solutions? 
Legislation/stricture FDA/USDA regulations. Court-developed standards
similar to likelihood of confusion factors? 
Will legal uncertainties be good for consumers by encouraging fuller
disclosures on labels?
 
RT: Flood of litigation: there was a flood pre-Pom because
of California’s law adopting FDA requirements as its own. Not clear how Pom
increases the flood because the preemption and preclusion inquiries are
different.
[more motivation for the cases you choose to describe: why
ask about these particular terms]

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IPSC First Breakout Session, Trademark Registration

Posted on August 6, 2015 by rtushnet
Barton Beebe & Jeanne Fromer, New York University School
of Law Is the Frontier Closing?: Registration Rates of Frequently Used Words on
the PTO’s Trademark Register 
 
Much of TM literature claims that the range of marks is
infinite; Qualitex discusses color
depletion but treats it as an exception. Is this right?  Some press questioning: marketers have
difficulty finding new names for craft beer, band names.  Another piece of conventional wisdom: marks
are an easy shorthand, and thus should be short and easy to remember/not
complicated b/c you want to use it to refer to a complicated set of attributes
that’s hard to articulate: shared by Landes & Posner and Branding for Dummies.
 
USPTO TM case files dataset: 1870-2014 with 7.4 million
applications, 1.8 million live registrations that include one or more letters
at end of 2013, out of 1.9 million live registrations. 820,000 live single word
registrations in 2013.  45 total
classes.  Compare to Corpus of
Contemporary American English, BYU; 450 million word corpus with lots of
sources.
 
What proportion of words in English are subject to TM
registration?  Across how many classes of
goods/services?  Are there changes in the
proportion of fanciful, image, and phrase marks over time?  We suspect that marks are becoming more
complicated over time, more image marks. 
Finally, what are the distances among marks along various dimensions,
such as sound, sight, and meaning.
 
Start with identical matches: word is registered on its own.
1000 most frequently used words: 718 or 71.8% are registered
as single word TMs.
5000 most: 2928 = 58.6%
10,000 most: 5236 = 52.4%
 
Not registered: disease, die, lose, violence, despite,
problems, difficult, daughter, nearly—makes sense they wouldn’t be registered.
 
Whole-word matches: of 1000, 997 or 99.7% are registered
somewhere in principal register, except although, showed, and seemed.
 
What about identical matches in classes: in class 41
(entertainment), 291 of the most popular 1000 are registered.
Whole word, the percentage in each class gets much much
higher. 946 in class 41.
 
Levenshtein matching: edit distance—how close is it to
another word? Dramatic results: most words are registered in most classes. 
 
The frontier is closing. 
Declining proportion of TM applications by year consists of single
words.  Less than 1/10 are standard English
words in 2000; decline is quite steady with internet-era dip.  Steady increase in applied-for marks’ length
as well.  Eclipse – single most
applied-for single word marks.  535
single word applications 1983-2013. 
Publication rates for single-word applications: if you are basing your
application on a registration you already own, you do well; otherwise success
rates are declining. Likewise for Elite, Titan, etc.  We think this is evidence of congestion.  200 most frequently applied for words:
declining publication rate over time (except for incumbents).  People are still trying, but they can’t get
registrations.
 
Surnames: 1000 most common surnames are 41% of population;
982 appear as a term within a registered TM. 
82% are registered as single words in some category.  In class 42, 668 are registered
(computers/tech related)—33% of population has their surname registered in
computers.  Might help explain declining
publication rates for single-word applications for surnames (except for
incumbents—95% success rate for them).  When
there are 100s of registrations of the surname already, even incumbents’
success rate is declining some; nonincumbents’ success rate is going down
further.
 
What remains: phrase marks in more detail; misspellings and
concatenations (which would make our results even more impressive; PTO has
instructions for how to search misspellings which we will use); acronyms;
non-English words; how many n-character words are possible in English given
phonetic constraints; means of measuring phonetic, visual, and conceptual
similarity; syntactic structure; measures of distance other than Levenshtein;
number of descriptive marks per class.
 
Policy implications: tighten protectability/registration
standards?  Instruct examiners
differently in different classes?  Requiring fanciful marks seems extreme (why?);
increased consumer search costs as complexity and congestion increase; effects
on competition—transaction costs, additional barrier for new entrants.
 
Sheff: incumbency effects could be related to inexperience
w/TM office [though to me that wouldn’t change the policy implications]
 
Rebecca Tushnet, Georgetown Law, Registering Discontent 
 
Carol Rose, Crystals
and Mud in Property Law: Legislatures make hard-edged rules and courts tend
to soften them for equitable reasons. 
They go back and forth in her accounts, but in TM they haven’t gone back
and forth, just an initial rule that seems to have gotten muddier and muddier.
 
The forehand: Registration is substantive: Incontestability
for descriptive terms; nationwide scope for local registered marks.  But the backhand: registration is procedural:
the same infringement standard is applied to registered and unregistered marks;
incontestable marks can be limited to essentially zero rights; Dawn Donut takes back almost all of what
nationwide scope gave.  B&B v. Hargis
is consistent w/ the procedural approach: b/c registration and infringement are
judged by the same standards, preclusion can apply.  Substantive: majority comments and Ginsburg’s
concurrence emphasizes that this will rarely happen. 
 
Substantive: Pro-Football court says cancellation doesn’t
preclude protection.  Procedural: Judge
Moore’s additional views in In re Tam say it does.
 
Substantive: registration of standard character mark gives
broader rights than a word in a particular font/design in PTO proceedings.  But procedural: court say that it doesn’t in
infringement proceedings, if you actually use the mark in a particular
font/design; courts also tend to ignore the registration as design/font and
evaluate words more heavily; they don’t notice that there’s a difference
between a picture and a 3D version of the depicted thing, as in the Mardi Gras
Bead Dog case.  Similar issues arise with
dilution, Exxon v. Fox for Fox’s FX logo.
 
(1)  
Should we choose? [My bias is yes.]
(2)  
If so, which? [I am leaning to arguing
substantive]
 
Lunney: small business often misunderstands importance of
registration—they think state registration/state corporate name register means
something, and it doesn’t.  Is
registration meant to be what you can use
or just an initial cut/fence?  Even if it
doesn’t mean much to courts most disputes never get to courts/never even become
disputes.
 
RT: I think that’s a reason to go substantive—it turns out
big entities aren’t deterred in the same way if they really really want to use
the term. [iPhone, etc.]  Equity suggests
that they should be treated the same way.
 
Q: likewise, cautious companies won’t file even if there’s
just substantial common law usage. That may help account for Beebe/Fromer
findings.
 
Q: What implications on First Amendment/treatment of
commercial speech?
 
RT: Trying to avoid that here, but I have no problem making
wholesale rules about preventing misleading speech.
 
Beebe: disclaimers: how they interact w/registration. Courts
ignore them/compare marks as a whole.
 
RT: substantive approach would provide a basis for changing
that.  Disclaimer = confusing similarity
can’t result from the disclaimed term, just like functional feature.
 
Q: other countries have more substantive approach: what
would that look like?  What about
approach of int’l companies?
 
RT: Int’l companies planning for substantive approach is
another reason that US should consider it if their behavior won’t change.  Other countries have double identity, which
could be good if accompanied by a lot of retrenchment in non-double identity
cases; other countries have robust TM use; many of our differences are not
internal to TM but come from broader traditions around advertising and the
First Amendment.
 
Dinwoodie: if you want substantive approach, should rights
contract over time if use is limited in a particular way?  Also must deal with overlap w/43/44—people will
just plead in the alternative if there’s not a clear doctrine.
 
Melissa Wasserman, University of Illinois College of Law
What Administrative Law Can Teach the Trademark System 
 
Intersection of administrative law & TM—proper standards
of review for TTAB determinations. 
Growing issue.  Guideposts in SCt
cases about deference due to informal-type review.  Fed. Cir. caselaw: decides that the review
should be de novo.  Chevron came out
after that; Fed. Cir. never revisited the issue.  In 1993, Fed. Cir. inexplicably applied
Chevron to TTAB’s legal constructions of an ambiguous statutory provision—no Chevron
step zero analysis at all (were they granted such authority); then proceeded to
ignore that in the future.  What about
Skidmore deference?  If you appeal to the
Fed. Cir. you can’t put new evidence in, so at a minimum there should be
Skidmore deference.  Likewise w/factual
Qs the Fed. Cir. isn’t giving enough deference.
 
Normatively: deference would be desirable.  Comparative institutional analysis: expertise
and capture.  Changes to PTO would be
helpful to improve it.  Not many
structures set up on TM side to bias it to granting TMs.  TM fees are set much more to cover costs; 11%
is from actual registrations.  In
comparison to patent side, TM office understudied for particular
incentives.  It’s all comparative—Fed.
Cir. is pro-IP as well.
 
PTO just makes registration determinations, not validity
determinations. If we give more deference to TTAB on validity, think about how
that would affect TM infringement.
 
Lunney: allowing bottle shape to be registered—PTO acted and
CCPA ultimately accepted.  Single color
registration: Fed. Cir. reversed denial and then Qualitex relied on “PTO accepts them!” even though that was only
because they’d been forced to. 
 
TTAB lacks consumer understanding.
 
A: would like to improve their capacity through creation of
guidelines. 
 
Jeremy Sheff: nervous about institutional analysis in the
abstract. Interactions b/t PTO & Congress, PTO is now lobbying to take away
de novo review before district courts & make exclusive avenue of review of
inter partes review at the Fed. Cir. Which is weird if you think of them as
different bodies w/different institutional interests.  PTO is generally P first and T second; patent
office tends to drive policy on these issues. 
If the prerogatives of a TM administrative agency were exercised by a
patent administrative agency, results might differ.
 
RT: I worry about capture—PTO is trying to get © too (look
at recent best practices in DMCA takedowns run by the PTO) and that would make
a huge difference in amount of industry capture; with the recent project on
whether renewals were actually of TMs in use, no one even considered a stronger
use requirement, which is evidence of being only devoted to people who have
lots of registrations.
 
Charles Colman: TTAB doesn’t worry about long term implications
of granting registrations, especially w/district courts—thinks it’s just a
presumption of validity and won’t be incontestable for 5 years.  TTAB also doesn’t know what to do w/parody.
 
A: she proposes a policy group; not just TTAB judges v.
federal district court judges.
 
Megan Carpenter, Texas A&M University School of Law
NSFW: An Empirical Study of Scandalous Trademarks
 
What’s really happening in practice?  26.72% of office actions discussed context;
remainder did not.  TTAB has held that
dictionaries alone can establish scandalousness.  TM examiners have high quarterly quotas and
they have limited time.  To be
outstanding, need 515-575 “balanced disposals” per quota; goals are that complete
examination should occur from search to notice of allowance/office action w/in
7 calendar days of receipt. EAs are under serious pressure to process
applications quickly; dictionaries are easier than assessing meaning in social
context of the day.
 
Dictionaries were primary source of support for rejection
91% of the time, 70% of the time as the only evidence.  17% used media evidence.  Same pattern in niche (adult) markets.  Also cite applicant’s ads.  Almost always used in refusing
registration.  If it’s an adult market,
then it’s evidence that the scandalous meaning is intended/understood.  If it’s a general market, more likely to be
scandalous.  Catch-22.  FAT COCK beer, even with an image of a plump
rooster, was rejected b/c available to general audience.  Same result w/goods or services: if goods are
scandalous then that’s evidence the mark will be scandalous: MR. HORSE COCK for
adult movies.  Deodorant: MY SHIT DON’T
STINK—because it was on nonscandalous goods, it would be available to everyone.
Examiners often recognize the relevance of context de jure, but abandon that de
facto.
 
In our data, success rate was less than 5%, compared to 44%
for small businesses generally—small businesses were over 97% of applications
in her data.  Low probability of response
= related to lack of representation by attorney.  Applicants don’t respond to office actions
very much—about 20% of the time.  80% =
abandonment.  Applicants who do respond
argue contextual factors.  Top arguments:
alternate meanings of words; marketplace context; actual goods.  Only 2 of 232 were successfully passed to
registration.
 
Where you see both approved and rejected: general trends
exist.  Bitch has a larger number than
whore, slut, and pothead. Examiners say that other registrations don’t matter,
but examiners do consider them informally.

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IPSC: Other IP

Posted on August 6, 2015 by rtushnet
Other IP  [Insert wry commentary about “fringe” fields like advertising law]
 
Sarah Burstein, The University of Oklahoma College of Law
Reviving Ornamentality 
 
Fed. Cir. killed the doctrine.  Statute says new, original, and ornamental designs can get a design patent—word has been in the statute from the start.  What now gets a design patent does not necessarily fit with assumptions: design patent for a “cage spinal implant.”  Or a “connector,” where the only claim is the interface with other parts of the connector to a computer.  Fuzzy slipper (no infringement but valid). 
 
Is the PTO asleep at the wheel? No, the problem is the Fed. Cir.  Regional circuits tended to have “dictated by function” as floor + something more—beauty, visual appeal.  Fed. Cir. has destroyed that.  (1) Ornamental is the opposite of functional.  (2) Thus ask whether design is primarily ornamental or primarily functional.  (3) Won’t choose the latter unless there are no (good) alternatives.  Clearly wrong: ornamental is not the opposite of functional.  A cup handle in the shape of a dragon can be both functional and ornamental.  They’re just different aspects.
 
And it’s not just about channeling.  Should the trade dress functionality requirement be the same as for design patent?  Apple v. Samsung: we use the same word for very different concepts, and should differentiate them further. In trade dress we want to protect real utility patents; don’t want useful design locked up. That’s part of ornamentality, but not all.  Some say the only good reason not to grant a design patent is to protect the utility patent system.  Rethink ornamentality.
 
The whole concept: make this the visual part, the unique/signature requirement of design patent; doesn’t appear in any other regime of law.  Material visual contribution to the art, using whatever aesthetic you want—has to be plausible that consumers would care. Traditional decorative arts = presumptively material.  Fed. Cir. allowed the spinal implant to be patented b/c the doctor would see it.  But the doctor has no reason to care.
 
RT: Really like the project. (1) If ornamental isn’t the opposite of functional, then where is the statutory basis for excluding functional designs from design patent?  (2) Why shouldn’t the utilitarian functionality standard be at least as broad in design patent as in TM?  Is your standard for patentability a requirement of aesthetic functionality? (Which might itself help serve a channeling function away from TM.)
 
A: (2) It sort of is.  That is what design patents are for.  (1) Ornamentality takes care of that. You have to care about it because of how it looks, not because of how it works.
 
Q: is it necessary to jettison the utilitarian component as much?  While the connector if functional, it also looks sleek and cool.  You buy the system because it all looks cool.
 
A: but it doesn’t have to be.  Apple wants it that way, but that’s a key issue with spare parts.
 
Q: Two formulations: one where the consumer is motivated to purchase, v. one where “do consumers care?”  The former wipes out a lot of elements that might be important—a Mercedes key looks really cool, as part of the whole design of the car.
 
Lisa Ramsey: Line drawing: who do we ask?  Industrial designers?  End consumers? 
 
Betsy Rosenblatt: Entire market value rule in patent asks a similar Q, why do people buy.  Ends up being very difficult to draw these lines—probably equally difficult in yours.
 
Q: wouldn’t this be redundant w/©, given the history of the relationship between the two? One of the reasons for design patent’s desuetude might be the expansion of ©.  Doesn’t seem like they became popular again until Fed. Cir. enabled them to do something with them that they couldn’t do with ©.
 
A: it’s not good that you can go under ©’s low bar.
 
Q: British case, Henshire v. ?, 10-12 judges talked about what they saw as artistic craftsmanship.  That was something that developed as a © category, in the background of Ruskin’s philosophy of art. Unworkable, but you still have design protection, to fill the gray area of functionality and aesthetics.
 
RT: Materiality jurisprudence can fix your problem of linedrawing!  Materiality is willing to judge based on wholesale ideas—this is the kindof thing that sells products of this type—rather than difficult individualized determinations.
 
Q: is there a difference between lock-in—things you have to buy—and not.  Also difficulty of competing without copying—costs of designing around.  “Material” in patent context immediately brings to mind inequitable conduct, and that’s a sticky idea for patent lawyers.
 
Q: Bleistein says you don’t have to make aesthetic judgments when looking at things that are inherently aesthetic, and you seem to agree, but I think that’s difficult/impossible. An aesthetic failure is an aesthetic move.
 
Yolanda King, Northern Illinois University College of Law
The Inadvisability of Nonuniformity in the Licensing of Cover Songs 
 
Copyright Office recommends change in 115(a)(2): compulsory license includes ability to make arrangement to conform it to style of performer but can’t change fundamental nature or melody and isn’t copyrightable as a derivative work w/o consent of copyright owner.  Much criticism of this, but CO recommends that licensing of cover songs in various formats be changed.  Physical format = subject to §115.  But if you’re going to create a cover and disseminate it in digital format—download, streaming—then it shouldn’t be subject to §115. 
 
Her piece analyzes the recommendations.  Most of the report is about harmonization, including in the music licensing marketplace, e.g., general public performance right for sound recordings. Here, they’re treating uses differently—disharmonization.  Change in music consumption: physical formats are predicted to disappear.  Which means digital uses will take over, not subject to compulsory licensing. Very strange recommendation; why not just do away with compulsory licensing if compulsory licensing is so bad?  Burden on creators: most creators of cover songs will be distributed digitally. 
 
Why would the CO do this?
 
Q: this sounds like politics, not logic. Want to know who was doing the lobbying.  May be available information.  (FOIA?) [But this doesn’t make as much sense as dividing terrestrial from digital radio, because almost everybody who makes physical records also sells them digitally.]
 
Q: sounds like a foot in the door—first you get digital, then you argue that digital only is unfair.
 
Q: huge potential deadweight losses in speech, b/c musical © owners want to extract rent; opportunity to get rents out of people who currently aren’t paying—people have been relying on that right for 100 years. 
 
A: Prince is an example: Prince would never license covers.  Unlike the rest of the report, which includes support and discussion, this change is proposed without much explanation/citation.
 
Rosenblatt: Some artists are deeply offended by the cover right.  That lobby is very loud in the conversation.  Look not just at ASCAP/Harry Fox but Tresonas of the world: seeks out high school show choirs & tells them to pay for custom arrangements.
 
Mira Sundara Rajan University of Glasgow – CREATe
Of Murals and Morals: Recent Art Controversies and What They Signify for the Visual Artists Rights Act (VARA) of 1990 
 
Nearing maturity—what’s happened?  Works themselves: artworks/cultural property represent a key interest.  Artists/creators have separate interests.  Owners of artworks; property owners—owners of buildings where artworks are situated.  The public as a separate interest holding group.
 
Required to implement Berne Convention.  Protection of artists is weak compared to other countries.  But also strong in some respects.  Strong preservation of artworks. 
 
What’s special about VARA? Destruction is generally prohibited, which is actually controversial in moral rights generally. Money damages play an important role and can be large: compensate the artists; compensate the public/cultural heritage loss.  Confusion about how to balance artistic interests with private property ownership.  Potential for radical action in the public interest, drawing on the ancestral power of VARA.
 
Kent Twitchell, $1.1 million for painting over his Ed Ruscha mural. Compare France, where in the Hugo case 1 Euro was awarded, as symbol.  But can money damages adequately compensate for the destruction of the work?  5Pointz controversy: court clearly says that they can—a case involving the “UN of Graffiti,” NY’s “Graffiti Mecca.”  Painted over by many artists over time.
 
US law is almost unique in destruction prevention (India also prohibits that) but requires works to be of recognized stature.  Amar Nath Sehgal v. Union of India (Delhi H.C. 2005)—mural damaged when being taken down for move to another site.  Damage to work occurred in 1978—wheels of justice grind slowly in India. Court: Moral rights exist in works of art if they acquire the status of cultural heritage of a nation, given the various int’l cultural property conventions India signed. 
 
5pointz: site as a whole is not an artwork; ephemeral nature may be important.  “Recognized stature”: under Carter v. Helmsley-Spear, must have (1) stature, (2) that is recognized by experts, public, segment of society. Experts disagreed on requirements for stature—public exposure; artist stature à work stature; consensus.  Bottom line: not a “work” and therefore stature didn’t matter; ephemeral nature of works argued against there being recognition.  Artists have now sued for destruction of their works—what a difference a day makes.  Ruling came out one day after the works had been whitewashed.
 
Picasso work: case won in the court of public opinion; outside VARA because of timeframe.  California Art Preservation Act allows public intervention to protect art—allows action to preserve cultural heritage.  Art preservation rather than artist rights’ statute?
 
Mary LaFrance University of Nevada, Las Vegas, William S. Boyd School of Law
False Advertising Claims Against Product Names and Labels 
 
Pom Wonderful: sued for having only a tiny bit of pomegranate and blueberry juice in its 99.4% apple and grape juice “Pomegranate Blueberry Juice” product.  SCt found no FDA safe harbor.  (DCt found same for USDA in 2008.)  So what makes a label false or misleading for state law and for the Lanham Act?  Potential for a flood of litigation.
 
Competitors risk the glass houses problem: their own label is vulnerable to challenge if they sue.  Pom’s Pomegranate Blueberry—what does that imply about the contents?  If they called it Blueberry Pomegranate would they be at risk?  Claims under state false advertising or deceptive trade practices acts?  Consumers do have standing/preemption question is unsettled.  Consumers don’t worry about the glass houses problem.  Class action issues.
 
Deceptively misdescriptive marks can be registered—PTO may have different perception of what is deceptive for registration versus false advertising purposes.  Non-deceptive in the abstract might be deceptive in context of label/ads. E.g., BREATHASURE.  Registered, but cancelled except for chewing gum.  Also registered HEALTHASURE for dietary supplements, which is still on the register.  Harder: health is so broad that perhaps this is puffery.  Mylanta NIGHT TIME STRENGTH—unregistered; found to be literally false. 
 
Gerber “Fruit Juice Snacks”—never even tried to register; false advertising claim allowed by 9th Cir. Label said “nutritious,” “made w/real fruit juice and other all natural ingredients,” which were corn syrup and water. Package showed a variety of fruits, but only fruit juice was white grape juice from conentrate. Consumers might have different meanings.
 
FROOT LOOPS held not to be deceptive—nobody seeing the packaging would believe there was actual fruit.
 
Terms may have defined meanings under regs, but consumers probably don’t know those meanings.  What would consumers expect about Pomegranate Blueberry juice: 50/50? 85/15 (actual)?  15/85?  10% corn syrup?  What do consumers think? Expects a lot of variation in reactions.  How would Juicy Fruit fare if seeking registration today?
We don’t know what consumers think of the words: organic, natural, free range, low fat/fat free/low carb, light/lite, zero trans fat (up to .5 mg/serving by regs), cholesterol free (up to 2 mg/serving), low cholesterol (up to 20 mg/serving) , zero calories (up to 5 cal/serving), sugar free (up to .5 g/serving), healthy, nutritious, juice v. juice drink v. juice beverage; cane juice.
 
Courts don’t always require survey evidence and sometimes ignore survey evidence that was offered. When they believe they know what a reasonable consumer would infer from a name/label/context.  Courts have not articulated factors or guidelines for determining what a reasonable consumer infers, unlike the multifactor likely confusion analysis. [I think that’s a good thing.]  Consumers may see different things.  [What is wrong with probabalistic analysis?]  Courts do more gut-level analysis in many situations. [Not clear that differs from TM; see Barton Beebe’s study.]
 
Solutions?  Legislation/stricture FDA/USDA regulations. Court-developed standards similar to likelihood of confusion factors?  Will legal uncertainties be good for consumers by encouraging fuller disclosures on labels?
 
RT: Flood of litigation: there was a flood pre-Pom because of California’s law adopting FDA requirements as its own. Not clear how Pom increases the flood because the preemption and preclusion inquiries are different.
[more motivation for the cases you choose to describe: why ask about these particular terms]
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IPSC First Breakout Session, Trademark Registration

Posted on August 6, 2015 by rtushnet
Barton Beebe & Jeanne Fromer, New York University School of Law Is the Frontier Closing?: Registration Rates of Frequently Used Words on the PTO’s Trademark Register 
 
Much of TM literature claims that the range of marks is infinite; Qualitex discusses color depletion but treats it as an exception. Is this right?  Some press questioning: marketers have difficulty finding new names for craft beer, band names.  Another piece of conventional wisdom: marks are an easy shorthand, and thus should be short and easy to remember/not complicated b/c you want to use it to refer to a complicated set of attributes that’s hard to articulate: shared by Landes & Posner and Branding for Dummies.
 
USPTO TM case files dataset: 1870-2014 with 7.4 million applications, 1.8 million live registrations that include one or more letters at end of 2013, out of 1.9 million live registrations. 820,000 live single word registrations in 2013.  45 total classes.  Compare to Corpus of Contemporary American English, BYU; 450 million word corpus with lots of sources.
 
What proportion of words in English are subject to TM registration?  Across how many classes of goods/services?  Are there changes in the proportion of fanciful, image, and phrase marks over time?  We suspect that marks are becoming more complicated over time, more image marks.  Finally, what are the distances among marks along various dimensions, such as sound, sight, and meaning.
 
Start with identical matches: word is registered on its own.
1000 most frequently used words: 718 or 71.8% are registered as single word TMs.
5000 most: 2928 = 58.6%
10,000 most: 5236 = 52.4%
 
Not registered: disease, die, lose, violence, despite, problems, difficult, daughter, nearly—makes sense they wouldn’t be registered.
 
Whole-word matches: of 1000, 997 or 99.7% are registered somewhere in principal register, except although, showed, and seemed.
 
What about identical matches in classes: in class 41 (entertainment), 291 of the most popular 1000 are registered.
Whole word, the percentage in each class gets much much higher. 946 in class 41.
 
Levenshtein matching: edit distance—how close is it to another word? Dramatic results: most words are registered in most classes. 
 
The frontier is closing.  Declining proportion of TM applications by year consists of single words.  Less than 1/10 are standard English words in 2000; decline is quite steady with internet-era dip.  Steady increase in applied-for marks’ length as well.  Eclipse – single most applied-for single word marks.  535 single word applications 1983-2013.  Publication rates for single-word applications: if you are basing your application on a registration you already own, you do well; otherwise success rates are declining. Likewise for Elite, Titan, etc.  We think this is evidence of congestion.  200 most frequently applied for words: declining publication rate over time (except for incumbents).  People are still trying, but they can’t get registrations.
 
Surnames: 1000 most common surnames are 41% of population; 982 appear as a term within a registered TM.  82% are registered as single words in some category.  In class 42, 668 are registered (computers/tech related)—33% of population has their surname registered in computers.  Might help explain declining publication rates for single-word applications for surnames (except for incumbents—95% success rate for them).  When there are 100s of registrations of the surname already, even incumbents’ success rate is declining some; nonincumbents’ success rate is going down further.
 
What remains: phrase marks in more detail; misspellings and concatenations (which would make our results even more impressive; PTO has instructions for how to search misspellings which we will use); acronyms; non-English words; how many n-character words are possible in English given phonetic constraints; means of measuring phonetic, visual, and conceptual similarity; syntactic structure; measures of distance other than Levenshtein; number of descriptive marks per class.
 
Policy implications: tighten protectability/registration standards?  Instruct examiners differently in different classes?  Requiring fanciful marks seems extreme (why?); increased consumer search costs as complexity and congestion increase; effects on competition—transaction costs, additional barrier for new entrants.
 
Sheff: incumbency effects could be related to inexperience w/TM office [though to me that wouldn’t change the policy implications]
 
Rebecca Tushnet, Georgetown Law, Registering Discontent 
 
Carol Rose, Crystals and Mud in Property Law: Legislatures make hard-edged rules and courts tend to soften them for equitable reasons.  They go back and forth in her accounts, but in TM they haven’t gone back and forth, just an initial rule that seems to have gotten muddier and muddier.
 
The forehand: Registration is substantive: Incontestability for descriptive terms; nationwide scope for local registered marks.  But the backhand: registration is procedural: the same infringement standard is applied to registered and unregistered marks; incontestable marks can be limited to essentially zero rights; Dawn Donut takes back almost all of what nationwide scope gave.  B&B v. Hargis is consistent w/ the procedural approach: b/c registration and infringement are judged by the same standards, preclusion can apply.  Substantive: majority comments and Ginsburg’s concurrence emphasizes that this will rarely happen. 
 
Substantive: Pro-Football court says cancellation doesn’t preclude protection.  Procedural: Judge Moore’s additional views in In re Tam say it does.
 
Substantive: registration of standard character mark gives broader rights than a word in a particular font/design in PTO proceedings.  But procedural: court say that it doesn’t in infringement proceedings, if you actually use the mark in a particular font/design; courts also tend to ignore the registration as design/font and evaluate words more heavily; they don’t notice that there’s a difference between a picture and a 3D version of the depicted thing, as in the Mardi Gras Bead Dog case.  Similar issues arise with dilution, Exxon v. Fox for Fox’s FX logo.
 
(1)   Should we choose? [My bias is yes.]
(2)   If so, which? [I am leaning to arguing substantive]
 
Lunney: small business often misunderstands importance of registration—they think state registration/state corporate name register means something, and it doesn’t.  Is registration meant to be what you can useor just an initial cut/fence?  Even if it doesn’t mean much to courts most disputes never get to courts/never even become disputes.
 
RT: I think that’s a reason to go substantive—it turns out big entities aren’t deterred in the same way if they really really want to use the term. [iPhone, etc.]  Equity suggests that they should be treated the same way.
 
Q: likewise, cautious companies won’t file even if there’s just substantial common law usage. That may help account for Beebe/Fromer findings.
 
Q: What implications on First Amendment/treatment of commercial speech?
 
RT: Trying to avoid that here, but I have no problem making wholesale rules about preventing misleading speech.
 
Beebe: disclaimers: how they interact w/registration. Courts ignore them/compare marks as a whole.
 
RT: substantive approach would provide a basis for changing that.  Disclaimer = confusing similarity can’t result from the disclaimed term, just like functional feature.
 
Q: other countries have more substantive approach: what would that look like?  What about approach of int’l companies?
 
RT: Int’l companies planning for substantive approach is another reason that US should consider it if their behavior won’t change.  Other countries have double identity, which could be good if accompanied by a lot of retrenchment in non-double identity cases; other countries have robust TM use; many of our differences are not internal to TM but come from broader traditions around advertising and the First Amendment.
 
Dinwoodie: if you want substantive approach, should rights contract over time if use is limited in a particular way?  Also must deal with overlap w/43/44—people will just plead in the alternative if there’s not a clear doctrine.
 
Melissa Wasserman, University of Illinois College of Law
What Administrative Law Can Teach the Trademark System 
 
Intersection of administrative law & TM—proper standards of review for TTAB determinations.  Growing issue.  Guideposts in SCt cases about deference due to informal-type review.  Fed. Cir. caselaw: decides that the review should be de novo.  Chevron came out after that; Fed. Cir. never revisited the issue.  In 1993, Fed. Cir. inexplicably applied Chevron to TTAB’s legal constructions of an ambiguous statutory provision—no Chevron step zero analysis at all (were they granted such authority); then proceeded to ignore that in the future.  What about Skidmore deference?  If you appeal to the Fed. Cir. you can’t put new evidence in, so at a minimum there should be Skidmore deference.  Likewise w/factual Qs the Fed. Cir. isn’t giving enough deference.
 
Normatively: deference would be desirable.  Comparative institutional analysis: expertise and capture.  Changes to PTO would be helpful to improve it.  Not many structures set up on TM side to bias it to granting TMs.  TM fees are set much more to cover costs; 11% is from actual registrations.  In comparison to patent side, TM office understudied for particular incentives.  It’s all comparative—Fed. Cir. is pro-IP as well.
 
PTO just makes registration determinations, not validity determinations. If we give more deference to TTAB on validity, think about how that would affect TM infringement.
 
Lunney: allowing bottle shape to be registered—PTO acted and CCPA ultimately accepted.  Single color registration: Fed. Cir. reversed denial and then Qualitex relied on “PTO accepts them!” even though that was only because they’d been forced to. 
 
TTAB lacks consumer understanding.
 
A: would like to improve their capacity through creation of guidelines. 
 
Jeremy Sheff: nervous about institutional analysis in the abstract. Interactions b/t PTO & Congress, PTO is now lobbying to take away de novo review before district courts & make exclusive avenue of review of inter partes review at the Fed. Cir. Which is weird if you think of them as different bodies w/different institutional interests.  PTO is generally P first and T second; patent office tends to drive policy on these issues.  If the prerogatives of a TM administrative agency were exercised by a patent administrative agency, results might differ.
 
RT: I worry about capture—PTO is trying to get © too (look at recent best practices in DMCA takedowns run by the PTO) and that would make a huge difference in amount of industry capture; with the recent project on whether renewals were actually of TMs in use, no one even considered a stronger use requirement, which is evidence of being only devoted to people who have lots of registrations.
 
Charles Colman: TTAB doesn’t worry about long term implications of granting registrations, especially w/district courts—thinks it’s just a presumption of validity and won’t be incontestable for 5 years.  TTAB also doesn’t know what to do w/parody.
 
A: she proposes a policy group; not just TTAB judges v. federal district court judges.
 
Megan Carpenter, Texas A&M University School of Law
NSFW: An Empirical Study of Scandalous Trademarks
 
What’s really happening in practice?  26.72% of office actions discussed context; remainder did not.  TTAB has held that dictionaries alone can establish scandalousness.  TM examiners have high quarterly quotas and they have limited time.  To be outstanding, need 515-575 “balanced disposals” per quota; goals are that complete examination should occur from search to notice of allowance/office action w/in 7 calendar days of receipt. EAs are under serious pressure to process applications quickly; dictionaries are easier than assessing meaning in social context of the day.
 
Dictionaries were primary source of support for rejection 91% of the time, 70% of the time as the only evidence.  17% used media evidence.  Same pattern in niche (adult) markets.  Also cite applicant’s ads.  Almost always used in refusing registration.  If it’s an adult market, then it’s evidence that the scandalous meaning is intended/understood.  If it’s a general market, more likely to be scandalous.  Catch-22.  FAT COCK beer, even with an image of a plump rooster, was rejected b/c available to general audience.  Same result w/goods or services: if goods are scandalous then that’s evidence the mark will be scandalous: MR. HORSE COCK for adult movies.  Deodorant: MY SHIT DON’T STINK—because it was on nonscandalous goods, it would be available to everyone. Examiners often recognize the relevance of context de jure, but abandon that de facto.
 
In our data, success rate was less than 5%, compared to 44% for small businesses generally—small businesses were over 97% of applications in her data.  Low probability of response = related to lack of representation by attorney.  Applicants don’t respond to office actions very much—about 20% of the time.  80% = abandonment.  Applicants who do respond argue contextual factors.  Top arguments: alternate meanings of words; marketplace context; actual goods.  Only 2 of 232 were successfully passed to registration.
 
Where you see both approved and rejected: general trends exist.  Bitch has a larger number than whore, slut, and pothead. Examiners say that other registrations don’t matter, but examiners do consider them informally.
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IPSC, opening plenary

Posted on August 6, 2015 by rtushnet
IPSC at DePaul
 
Opening Plenary Session
 
Tributes to Benjamin Liu & Greg Lastowka, much-missed
colleagues who passed away in the last year.
 
Roberta Kwall, DePaul University College of Law
 
Changes in law school in last 15 years—rankings are more
set.  Money is tight.  Teaching loads are increasing, not just
numerically but in scope/areas other than IP. 
Affects ability to do scholarship. 
Schools may want us to work on the side: consistent w/ making our
students practice ready.  How do we keep
doing our scholarship?  Shari Motro, Scholarship Against Desire: authenticity
in legal scholarship.  Not shooting from
the hip, but doing the groundwork/getting an advanced degree if needed for the
breadth of knowledge you want to have. 
We won’t be judged in the future on the quantity of our work.  Need a safe, nurturing place to listen
without planning a response; the wisdom of the group will go up.

The key to successful scholarship is the ability to reinvent oneself, like
Madonna: true of scholarship venues as well as scholars.
 
Peter Yu, Texas A&M University School of Law
 
History: lots of schools were starting IP programs; one way
to maintain leadership is to bring scholars together, and bring schools
together as IPSC sponsors.  Importance of
creating community despite costs.
 
Mark Lemley, Stanford Law School
 
Size of IP community has grown a lot. Dramatic expansion in
subject matter from mostly ©—only 5 people have taught patent law longer than
Mark L and Dan Burk.  Lateral expansion
is good result: trade secret & design are newest additions.  Expansion in methodology, in particular empirical
work. 
 
Not so good things: increasing divide into more polarized
camps among scholars, not just practicing lawyers.  High protectionist group has their
conferences and low protectionists have theirs; paying less attention to the
other side, and that’s a worrisome thing. 
Perhaps result of real world importance of what we do—people are looking
for answers that support them and seek ideological scholarship.  But introduction of politics into IP
scholarly community is worrying.  Also
worrying: growing role of money. Resource constraints are important; but it’s
also a function of the real world relevance/politics: some people would like to
spend lots of money to get the answer they want.  That connection is becoming more clear.  You can have $ if you can demonstrate that
patent holdup isn’t a problem in the telecom industry, or if you can show that
intermediary liability is too great. 
Politics + money isn’t good for society at large and it’s not good for
the IP community.  Like the internet +
anonymity: can really mess things up.
 
What is to be done? 
IP community has long history of cohesiveness, talking to each
other.  That makes us the envy of most
other scholarly communities.  Robin
Feldman & Lemley are working on a statement of principles for taking money
for scholarship. 
 
Graeme Dinwoodie, University of Oxford Faculty of Law 
 
Mentoring of junior colleagues as an objective, pretty early
on. Advancement of ideas/development of scholarly community.  Social interactions make inevitable
professional disagreements an ordinary part of the interaction, rather than
tense (cf. constitutional law) and encourages new members of the community to
be willing to disagree.  New
internationalism: international participants, access to international
scholarship.  More scholarship is
occurring pre-tenure, which is a good thing without a research-based doctoral
agree. But many of the pretenure positions are short, and there’s tremendous
pressure to present at IPSC as well as to produce law review articles.  Given vast amount of info, do you have to
choose between reading, writing, and thinking? 
Encourage younger colleagues to attend/participate w/out need to present
and write; that may require deans to rethink allocation of travel funds.
 
Mike Madison: Publication styles tied to book chapters,
journal articles, etc.  What’s changed?
 
Lemley: Definite move towards the blog post (heh),
online/short/less footnoted article, which is in many respects a good thing;
law reviews traditionally bloat from need to explain everything to second year
law students. If you can assume a base of knowledge and get to the interesting
point quickly, that’s great. But “don’t write long articles” is no better than “don’t
write short” as a rule. New rule of no longer than 25,000 words privileges
certain kinds of scholarship and not others. 
How do we evaluate ideas in short/nontraditional forms?  Dennis Crouch has had big impact on patent
scholarship, mostly by writing short summaries/items of interest to the
academic world. Won’t today get hired at top school for that, which is a real
issue.  It’s a move with substantial
costs and substantial professional benefits. 
We are breaking out of traditional molds in various respects—more peer
reviewed journals; interdisciplinary publishing. But ways in which ideas are
communicated through smaller quicker responses are not ways the legal academy
is (yet) willing to recognize.
 
Kwall: Social media revolution has changed how we think and
write in our daily lives.  But when you’re
writing high impact scholarship, even if you’re going to be taking your article
and spinning it to editorials [or amicus briefs!] those have to be based on the
careful groundwork of your more thorough scholarship.  [For me, it goes both ways—having a series of
blog posts on, say, Dastar, enables
me to go back and identify trends/things that interest me theoretically.]  That can benefit your institution: being
featured in media is in some ways better for reputational effect than just
writing law review articles, but you can’t do media successfully without
scholarship.
 
Dinwoodie: We’ve lost a little bit in having space to work
through ideas; we need to be more pluralist about what’s good scholarship in
methods, place of publication, etc. Should be less hesitation for young
scholars to think about books than 15 years ago.  Online availability of chapters, at least, is
making the ideas in a book capable of reaching more places than it was.
 
Yu: When he started, advice was to not write a book until
you’ve been publishing for 10 years. The book he’d write now would be very
different than the book he would have written starting out.  Think about what type of book you want to
write—now he’s in a better position/more experienced.
 
Q about blogging: what’s the best way to avoid being taken
over by trolls/have a productive conversation? 
James Grimmelmann says blog in your own space.
 
Lemley: never read the comments.  Ironclad rule.  [Not so true of Livejournal, sigh.]  Discussion format has to be small group of
repeat players whom you know.

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IPSC, opening plenary

Posted on August 6, 2015 by rtushnet
IPSC at DePaul
 
Opening Plenary Session
 
Tributes to Benjamin Liu & Greg Lastowka, much-missed colleagues who passed away in the last year.
 
Roberta Kwall, DePaul University College of Law
 
Changes in law school in last 15 years—rankings are more set.  Money is tight.  Teaching loads are increasing, not just numerically but in scope/areas other than IP.  Affects ability to do scholarship.  Schools may want us to work on the side: consistent w/ making our students practice ready.  How do we keep doing our scholarship?  Shari Motro, Scholarship Against Desire: authenticity in legal scholarship.  Not shooting from the hip, but doing the groundwork/getting an advanced degree if needed for the breadth of knowledge you want to have.  We won’t be judged in the future on the quantity of our work.  Need a safe, nurturing place to listen without planning a response; the wisdom of the group will go up.
The key to successful scholarship is the ability to reinvent oneself, like Madonna: true of scholarship venues as well as scholars.
 
Peter Yu, Texas A&M University School of Law
 
History: lots of schools were starting IP programs; one way to maintain leadership is to bring scholars together, and bring schools together as IPSC sponsors.  Importance of creating community despite costs.
 
Mark Lemley, Stanford Law School
 
Size of IP community has grown a lot. Dramatic expansion in subject matter from mostly ©—only 5 people have taught patent law longer than Mark L and Dan Burk.  Lateral expansion is good result: trade secret & design are newest additions.  Expansion in methodology, in particular empirical work. 
 
Not so good things: increasing divide into more polarized camps among scholars, not just practicing lawyers.  High protectionist group has their conferences and low protectionists have theirs; paying less attention to the other side, and that’s a worrisome thing.  Perhaps result of real world importance of what we do—people are looking for answers that support them and seek ideological scholarship.  But introduction of politics into IP scholarly community is worrying.  Also worrying: growing role of money. Resource constraints are important; but it’s also a function of the real world relevance/politics: some people would like to spend lots of money to get the answer they want.  That connection is becoming more clear.  You can have $ if you can demonstrate that patent holdup isn’t a problem in the telecom industry, or if you can show that intermediary liability is too great.  Politics + money isn’t good for society at large and it’s not good for the IP community.  Like the internet + anonymity: can really mess things up.
 
What is to be done?  IP community has long history of cohesiveness, talking to each other.  That makes us the envy of most other scholarly communities.  Robin Feldman & Lemley are working on a statement of principles for taking money for scholarship. 
 
Graeme Dinwoodie, University of Oxford Faculty of Law 
 
Mentoring of junior colleagues as an objective, pretty early on. Advancement of ideas/development of scholarly community.  Social interactions make inevitable professional disagreements an ordinary part of the interaction, rather than tense (cf. constitutional law) and encourages new members of the community to be willing to disagree.  New internationalism: international participants, access to international scholarship.  More scholarship is occurring pre-tenure, which is a good thing without a research-based doctoral agree. But many of the pretenure positions are short, and there’s tremendous pressure to present at IPSC as well as to produce law review articles.  Given vast amount of info, do you have to choose between reading, writing, and thinking?  Encourage younger colleagues to attend/participate w/out need to present and write; that may require deans to rethink allocation of travel funds.
 
Mike Madison: Publication styles tied to book chapters, journal articles, etc.  What’s changed?
 
Lemley: Definite move towards the blog post (heh), online/short/less footnoted article, which is in many respects a good thing; law reviews traditionally bloat from need to explain everything to second year law students. If you can assume a base of knowledge and get to the interesting point quickly, that’s great. But “don’t write long articles” is no better than “don’t write short” as a rule. New rule of no longer than 25,000 words privileges certain kinds of scholarship and not others.  How do we evaluate ideas in short/nontraditional forms?  Dennis Crouch has had big impact on patent scholarship, mostly by writing short summaries/items of interest to the academic world. Won’t today get hired at top school for that, which is a real issue.  It’s a move with substantial costs and substantial professional benefits.  We are breaking out of traditional molds in various respects—more peer reviewed journals; interdisciplinary publishing. But ways in which ideas are communicated through smaller quicker responses are not ways the legal academy is (yet) willing to recognize.
 
Kwall: Social media revolution has changed how we think and write in our daily lives.  But when you’re writing high impact scholarship, even if you’re going to be taking your article and spinning it to editorials [or amicus briefs!] those have to be based on the careful groundwork of your more thorough scholarship.  [For me, it goes both ways—having a series of blog posts on, say, Dastar, enables me to go back and identify trends/things that interest me theoretically.]  That can benefit your institution: being featured in media is in some ways better for reputational effect than just writing law review articles, but you can’t do media successfully without scholarship.
 
Dinwoodie: We’ve lost a little bit in having space to work through ideas; we need to be more pluralist about what’s good scholarship in methods, place of publication, etc. Should be less hesitation for young scholars to think about books than 15 years ago.  Online availability of chapters, at least, is making the ideas in a book capable of reaching more places than it was.
 
Yu: When he started, advice was to not write a book until you’ve been publishing for 10 years. The book he’d write now would be very different than the book he would have written starting out.  Think about what type of book you want to write—now he’s in a better position/more experienced.
 
Q about blogging: what’s the best way to avoid being taken over by trolls/have a productive conversation?  James Grimmelmann says blog in your own space.
 
Lemley: never read the comments.  Ironclad rule.  [Not so true of Livejournal, sigh.]  Discussion format has to be small group of repeat players whom you know.
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Presumption of injury saves Lanham Act monetary award

Posted on August 5, 2015 by rtushnet
General Steel Domestic Sales, LLC v. Chumley, — Fed.Appx.
—-, 2015 WL 4591924, Nos. 14–1119, 14–1121 (10th Cir. July 31, 2015)
 
Chumley formerly worked for General Steel, then founded
Armstrong after an unfriendly parting. 
The parties compete to sell prefabricated steel buildings directly to
consumers.
 
That’s where the lies began. One
Internet posting purported to detail Armstrong’s community service efforts in
the Middle East, offering quotations from the company’s Vice President of
International Affairs, J.P. Remington, III. The problem? The charity didn’t
exist. Neither did Mr. Remington. And the false claims didn’t stop with phony
philanthropy: soon General Steel was in the crosshairs. Ads on Google, for
example, claimed that Armstrong sold “General Steel” buildings. It didn’t. The
company’s website claimed that Armstrong fabricates the steel it uses to
assemble its buildings. It doesn’t. And one ad on Armstrong’s website—entitled
“May the Best Building Win”—offered a side-by-side comparison of Armstrong’s
and General Steel’s products and claimed that General Steel provided consumers
with fewer options than, in truth, it did.
 
General Steel sued under the Lanham Act and the Colorado
Consumer Protection Act, and here we find out that presumptions matter. The
district court granted summary judgment on the state-law claims for failure to
show harm, but granted an injunction and disgorgement of profits on the Lanham
Act claims based on the statements that Armstrong fabricated its own steel;
that Armstrong offered “general steel” buildings for sale; and that General
Steel failed to offer pregalvanized steel or stainless fasteners for its
buildings. The court of appeals affirmed.
 
The court of appeals heartily agreed that the statements at
issue were literally false.  Steel
fabrication: Armstrong isn’t a steel manufacturer but purchases steel from
others and then assembles it into buildings. Armstrong argued that its
discussion of “each piece of steel we fabricate” was ambiguous, but it
wasn’t.  “General steel” buildings:
Armstrong didn’t sell its rival’s products. 
Armstrong again argued ambiguity (say that three times fast), reasoning
that its statement could also mean “Armstrong makes ‘general’ (i.e.,
all-purpose) steel buildings.” However, there was no credible evidence in the
record that the term “general steel” is used in the industry to describe steel
buildings sold by anyone else.  (Note
that we determine meaning here without resort to dictionaries or surveys!)  Meanwhile, Armstrong’s ads included
side-by-side comparisons between its products and those of General Steel, even
using General Steel’s logo and sometimes capitalizin “General Steel.” “In this
light, there’s just no doubt what Armstrong’s ads were talking about—or that
they were literally false.” 
 
And finally: Armstrong argued that its statements about providing
“pre-galvanized secondary framing” and “stainless steel fasteners” where
General Steel didn’t were literally true because Armstrong includes these items
unless the customer declines them, while General Steel doesn’t include them
unless the customer requests them. But Armstrong’s ads didn’t explain anything
like that, for example by comparing “standard” features.  Instead, they purported to compare available
features, and thus were literally false. 
The evidence at trial showed that both companies provided these features
at additional cost and that customers could choose whether to buy them.
 
Materiality: without deciding the appropriate burden or
standard, the court of appeals held that the third set of false statements was
“material under any conceivable standard,” using Armstrong’s own evidence at
trial that “steel fasteners and pregalvanized framing were important to
Armstrong’s brand, giving the company a competitive edge and improving the
quality of its buildings.”  The district
court found that both “general steel” and fabrication of steel went to the
products’ inherent qualities or characteristics and thus presumed materiality;
the court of appeals saw no reason to find error.
 
Injury: the district court found that the literal falsity
was willful and in side-by-side comparative advertising, and thus presumed injury
to General Steel.  Assuming, without
deciding, that this presumption was appropriate, Armstrong failed to show that
the presumption was unwarranted on the grounds that some of its false
statements weren’t made in comparative advertising.  True, they were all made on Armstrong’s
expressly comparative “May the Best Building Win” webpage. But Armstrong argued
that that two of the three statements were in small print after side-by-side
columnar comparisons between the two brands, which is like a separate ad.  The court of appeals was unimpressed.  It wasn’t willing to split a single webpage
in two.
 
Remedies: in calculating disgorgement of profits, the
district court used a burden-shifting framework: General Steel had to prove
Armstrong’s gross profits during the period of false advertising and Armstrong
had to prove what part of those profits wasn’t attributable to its false
advertising.  Armstrong didn’t produce
any such evidence.  The district court
used a procedure that fit well with the statute, which says: “In assessing
profits the plaintiff shall be required to prove defendant’s sales only;
defendant must prove all elements of cost or deduction claimed.”  The cases Armstrong cited said that, “unless
there is some proof that plaintiff lost sales or profits, or that defendant
gained them, the principles of equity do not warrant an award of defendant’s
profits.” “We don’t question the propriety of this principle, only its
relevance when it comes to determining not whether monetary relief should be
awarded but whether (as here) to employ the statutorily prescribed
burden-shifting procedure to ascertain its amount.”
 
General Steel cross-appealed on its state law consumer
protection claims.  The district court
granted summary judgment because General Steel didn’t have sufficient evidence
of harm.  Armstrong wasn’t required to
show lack of harm to win on summary judgment. 
The differing results on the two claims show the importance of
presumptions—but also highlight a continuing problem with state law/Lanham Act
interactions, which is that courts apply the same standards to both most of the
time and then randomly diverge, usually at the behest of the parties.

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Presumption of injury saves Lanham Act monetary award

Posted on August 5, 2015 by rtushnet
General Steel Domestic Sales, LLC v. Chumley, — Fed.Appx. —-, 2015 WL 4591924, Nos. 14–1119, 14–1121 (10th Cir. July 31, 2015)
 
Chumley formerly worked for General Steel, then founded Armstrong after an unfriendly parting.  The parties compete to sell prefabricated steel buildings directly to consumers.
 
That’s where the lies began. One Internet posting purported to detail Armstrong’s community service efforts in the Middle East, offering quotations from the company’s Vice President of International Affairs, J.P. Remington, III. The problem? The charity didn’t exist. Neither did Mr. Remington. And the false claims didn’t stop with phony philanthropy: soon General Steel was in the crosshairs. Ads on Google, for example, claimed that Armstrong sold “General Steel” buildings. It didn’t. The company’s website claimed that Armstrong fabricates the steel it uses to assemble its buildings. It doesn’t. And one ad on Armstrong’s website—entitled “May the Best Building Win”—offered a side-by-side comparison of Armstrong’s and General Steel’s products and claimed that General Steel provided consumers with fewer options than, in truth, it did.
 
General Steel sued under the Lanham Act and the Colorado Consumer Protection Act, and here we find out that presumptions matter. The district court granted summary judgment on the state-law claims for failure to show harm, but granted an injunction and disgorgement of profits on the Lanham Act claims based on the statements that Armstrong fabricated its own steel; that Armstrong offered “general steel” buildings for sale; and that General Steel failed to offer pregalvanized steel or stainless fasteners for its buildings. The court of appeals affirmed.
 
The court of appeals heartily agreed that the statements at issue were literally false.  Steel fabrication: Armstrong isn’t a steel manufacturer but purchases steel from others and then assembles it into buildings. Armstrong argued that its discussion of “each piece of steel we fabricate” was ambiguous, but it wasn’t.  “General steel” buildings: Armstrong didn’t sell its rival’s products.  Armstrong again argued ambiguity (say that three times fast), reasoning that its statement could also mean “Armstrong makes ‘general’ (i.e., all-purpose) steel buildings.” However, there was no credible evidence in the record that the term “general steel” is used in the industry to describe steel buildings sold by anyone else.  (Note that we determine meaning here without resort to dictionaries or surveys!)  Meanwhile, Armstrong’s ads included side-by-side comparisons between its products and those of General Steel, even using General Steel’s logo and sometimes capitalizin “General Steel.” “In this light, there’s just no doubt what Armstrong’s ads were talking about—or that they were literally false.” 
 
And finally: Armstrong argued that its statements about providing “pre-galvanized secondary framing” and “stainless steel fasteners” where General Steel didn’t were literally true because Armstrong includes these items unless the customer declines them, while General Steel doesn’t include them unless the customer requests them. But Armstrong’s ads didn’t explain anything like that, for example by comparing “standard” features.  Instead, they purported to compare available features, and thus were literally false.  The evidence at trial showed that both companies provided these features at additional cost and that customers could choose whether to buy them.
 
Materiality: without deciding the appropriate burden or standard, the court of appeals held that the third set of false statements was “material under any conceivable standard,” using Armstrong’s own evidence at trial that “steel fasteners and pregalvanized framing were important to Armstrong’s brand, giving the company a competitive edge and improving the quality of its buildings.”  The district court found that both “general steel” and fabrication of steel went to the products’ inherent qualities or characteristics and thus presumed materiality; the court of appeals saw no reason to find error.
 
Injury: the district court found that the literal falsity was willful and in side-by-side comparative advertising, and thus presumed injury to General Steel.  Assuming, without deciding, that this presumption was appropriate, Armstrong failed to show that the presumption was unwarranted on the grounds that some of its false statements weren’t made in comparative advertising.  True, they were all made on Armstrong’s expressly comparative “May the Best Building Win” webpage. But Armstrong argued that that two of the three statements were in small print after side-by-side columnar comparisons between the two brands, which is like a separate ad.  The court of appeals was unimpressed.  It wasn’t willing to split a single webpage in two.
 
Remedies: in calculating disgorgement of profits, the district court used a burden-shifting framework: General Steel had to prove Armstrong’s gross profits during the period of false advertising and Armstrong had to prove what part of those profits wasn’t attributable to its false advertising.  Armstrong didn’t produce any such evidence.  The district court used a procedure that fit well with the statute, which says: “In assessing profits the plaintiff shall be required to prove defendant’s sales only; defendant must prove all elements of cost or deduction claimed.”  The cases Armstrong cited said that, “unless there is some proof that plaintiff lost sales or profits, or that defendant gained them, the principles of equity do not warrant an award of defendant’s profits.” “We don’t question the propriety of this principle, only its relevance when it comes to determining not whether monetary relief should be awarded but whether (as here) to employ the statutorily prescribed burden-shifting procedure to ascertain its amount.”
 
General Steel cross-appealed on its state law consumer protection claims.  The district court granted summary judgment because General Steel didn’t have sufficient evidence of harm.  Armstrong wasn’t required to show lack of harm to win on summary judgment.  The differing results on the two claims show the importance of presumptions—but also highlight a continuing problem with state law/Lanham Act interactions, which is that courts apply the same standards to both most of the time and then randomly diverge, usually at the behest of the parties.
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Photo finish: allegedly unauthorized (c) sublicensing isn’t false designation of origin

Posted on August 3, 2015 by rtushnet
Photographic Illustrators Corp. v. Orgill, Inc., 2015 WL
4572296, No. 14-11818 (D. Mass. July 29, 2015)
 
PIC specializes in commercial photography.  It took photos of lighting fixtures
manufactured by nonparty OSI.  Defendants
Orgill and Farm & City Supply distribute OSI products.  PIC sued them for copyright infringement;
violation of the DMCA’s CMI provision, §1202, and false designation of
origin/false advertising.  Here the court
kicks out everything but some copyright infringement claims.
 
PIC licensed OSI to use photos of OSI products, with a
non-exclusive, worldwide license to use, sublicense, and permit use, except
that OSI couldn’t sublicense images “in exchange for valuable consideration such
as a fee (e.g., as stock photography).” The licensing agreement also provided:
“To the extent reasonably possible and practical, OSI shall … include a
copyright notice indicating PIC as the copyright owner and/or include proper
attribution indicating Paul Picone as the photographer for Images Used by OSI.”
 
Orgill is a wholesale distributor for OSI, and used product
images from “e-mail, Dropbox, OSI’s external website, or OSI’s internal web
server.” Whether Orgill knew about PIC’s license to OSI was disputed.  OSI conducted twice-yearly reviews of its
product images for five years and never challenged the way OSI images
appeared.  After PIC sued, OSI and Orgill
executed a confirmatory copyright sublicense agreement, effective nunc pro tunc
as of June 1, 2006.  The sublicensing
agreement also included a provision obligating Orgill to include and instruct
its sublicensees/dealers to include, “to the extent reasonably possible and
practical with respect to size, prominence, aesthetics, and Use, a copyright notice
indicating PIC as the copyright owner of the Images.”  It further covenanted not to remove any
copyright notice before distributing images.
 
Farm & City Supply is one of Orgill’s dealers: Orgill
uses an ecommerce platform that creates an online store, which dealers then
brand and publish with their own names. 
To do so, dealers pay a flat $750 setup fee and a monthly fee. Dealers
can get pictures from the platform, including the PIC images, but it’s disputed
whether these fees cover those pictures. 
Orgill also has a product information library on an FTP server, from
which dealers may download product images and other data after receiving a
secure login.  There’s no additional fee
for using the server. Farm & City got the images at issue both from the FTP
server and the ecommerce platform.
 
For a time, Farm & City placed a watermark reading
“farmandcitysupply” across the images appearing on its eBay storefront.
 
Defendants bore their burden of showing that OSI impliedly
licensed Orgill’s use of the images, given their longstanding business
practices and OSI’s repeated twice-yearly review of Orgill’s catalogues.  The remaining question was whether Orgill’s
use of the challenged images exceeded the scope of that license, because OSI
couldn’t give Orgill more rights than OSI itself had.  The PIC-OSI license barred sublicensing in
exchange for valuable consideration, and required attribution “[t]o the extent
reasonably possible and practical.” 
 
Disputed questions about the fee and attribution precluded
summary judgment on infringement. As to the fee, the fact that Orgill provided
free FTP access “does not diminish the fact that those images were available in
another forum only following an initial payment.” Orgill argued that the fee it
charged didn’t depend on how many images customers downloaded, or whether they
downloaded images at all, but the fact that Farm & City paid the fee to get
a bundle that included the images precluded summary judgment.  (I’m not entirely clear what legal standard
the factfinder is supposed to use to resolve the dispute.)
 
As for attribution, defendants argued that it would not have
been “reasonably possible and practical” to include attribution on the images,
because Orgill typically “crop[s]” product images “for tighter fit.”  The court wasn’t impressed.  Since the lawsuit, Orgill includes some
attribution on OSI images in the form of a “sidenote or footnote for images
appearing on websites and in catalogs.” “While it may not be practical for the
defendants to include PIC’s full-sized copyright notice, PIC need not
demonstrate as much to defeat a motion for summary judgment.” It was enough to
show that there was no attribution, but that defendants “have apparently been
able to include at least some attribution since learning of PIC’s copyright
interest in the images.”  There were also
factual issues about whether Orgill knew of PIC’s existence and its copyright
interest in the images before the lawsuit, which also precluded Orgill’s
innocent infringement defense. [I assume further proceedings will address
whether this breach of the license actually results in infringement, or just
breach.]
 
On innocent infringement, Orgill submitted evidence that it
had never heard of PIC until the onset of this lawsuit and that, at all
relevant times, it believed its use of the images was licensed.  But Orgill’s testimony contradicted the terms
of the sublicensing agreement, which purportedly codified the terms of a
pre-existing agreement between Orgill and OSI, and which included a covenant to
include “a copyright notice indicating PIC as the copyright owner of the
Images.” [Comment: Yikes!  The
confirmatory sublicense leaves Orgill worse off than it was with just an
implied license!]  “Orgill cannot have
its lightbulb and eat it, too – either it always knew that PIC existed and that
there were certain limitations on its use of the images, or else Orgill did not
then, and does not now, know of any such limitations.”  [Well, presumably it knows now. 
I understand that the confirmatory sublicense was poorly drafted, but
let’s get real—isn’t the most likely scenario that Orgill didn’t know that PIC
existed, but believed that OSI had the right to allow it to use the OSI images,
whatever their ultimate source?]
 
Farm & City, however, prevailed on its innocent
infringement defense, limiting its potential liability for statutory damages:
 
Farm & City submitted
undisputed evidence that it did not know PIC existed until this lawsuit was
filed, that it obtained all of the images at issue from Orgill free of copyright
markings, and that Orgill never advised it of any limitations on its use of the
images. Moreover, since Farm & City was not party to the sublicensing
agreement between OSI and Orgill, there is no indication whatsoever that it
might have been aware of its duty to attribute the images to PIC.
 
PIC also alleged violation of §1202’s prohibition on the
provision of false CMI. Farm & City allegedly violated 1202(a) by adding a
watermark reading “farmandcitysupply” to some images for use in its eBay storefront.
Further, PIC claimed that both defendants removed or altered PIC’s CMI in
violation of § 1202(b) before distributing the images.
 
Farm & City prevailed as a matter of law.  “Farm & City prevails as a matter of law
on this issue. To be liable for adding false CMI under § 1202(a), a defendant
must intend to ‘induce, enable, facilitate, or conceal infringement.’”  Undisputed testimony explained that the
watermark “allows whoever is buying the product to know that they’re buying it
from Farm & City Supply,” thus helping to “differentiate yourself from
other sellers” and “increase your sales and make money.”  PIC argued that this amounted to a claim of
authorship of the photos, but even if so, “Farm & City did not intend to
“induce, enable, facilitate, or conceal infringement,” since it did not know of
PIC’s existence until this lawsuit was filed and was unaware that it had any
attribution obligations.”
 
Nor did PIC submit evidence to support its claim of CMI
removal.  There was no evidence that
either defendant ever received images with
CMI; rather, the record indicated the contrary. 
PIC said that its photographer put PIC attribution with every image he
gave to OSI, thus justifying the inference that the defendants removed the CMI.
“Given the existence of a third party that has not been deposed and is
otherwise absent from the case, it would be too speculative to infer that
Orgill removed CMI,” and even more so with Farm & City.
 
PIC also alleged that Farm & City violated §43(a) by
putting the “farmandcitysupply” watermark on the images, constituting false
designation of origin and false advertising.
 
False designation of origin: No.  Dastar.  (I hope the court awards fees.  But it might not, because there are a few
cases out there that egregiously misread Dastar
and allow similar claims to proceed past a motion to dismiss, even though the
pixels/bytes produced by Farm & City were not the pixels/bytes/images
produced by PIC, which would be required for true reverse passing off under Dastar—Dastar directs our attention to the entity that produced the copy at issue (here Farm & City,
at least with the assistance of eBay), and not to the entity that produced the initial creative work subsequently
multiplied in copies.)  PIC argued
that, by adding the watermark without otherwise changing the images, Farm &
City engaged in mere repackaging of the images and thus in reverse passing
off.  The court, despite its jarring
willingness to entertain PIC’s argument, ultimately disagreed.  Dastar says
that “origin of goods” refers to “the producer of the tangible goods that are
offered for sale.” Nothing in Dastar “suggests
that the Lanham Act provides a cause of action even where the misrepresentation
in question did not concern the source of a tangible good for sale to the
public.” 
 
The tangible good for sale here is OSI’s lightbulbs.  As Dastar
held, “[t]he consumer who buys a branded product does not automatically assume
that the brand-name company is the same entity that came up with the idea for
the product, or designed the product – and typically does not care whether it
is. The words of the Lanham Act should not be stretched to cover matters that
are typically of no consequence to consumers.” 
Similarly, customers on eBay want to buy lightbulbs, and aren’t
interested in the author of the product images. “There is no record evidence
that any consumer believed that Farm & City’s watermark indicated ownership
of the photographs that depicted the lightbulbs.”
 
False advertising: the court also joined the consensus that
plaintiffs can’t save a Dastar-barred
§43(a)(1)(A) merely by repleading the same facts under §43(a)(1)(B).   Authorship does not constitute part of the “nature,
characteristics, or qualities” of a good for sale.

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Photo finish: allegedly unauthorized (c) sublicensing isn’t false designation of origin

Posted on August 3, 2015 by rtushnet
Photographic Illustrators Corp. v. Orgill, Inc., 2015 WL 4572296, No. 14-11818 (D. Mass. July 29, 2015)
 
PIC specializes in commercial photography.  It took photos of lighting fixtures manufactured by nonparty OSI.  Defendants Orgill and Farm & City Supply distribute OSI products.  PIC sued them for copyright infringement; violation of the DMCA’s CMI provision, §1202, and false designation of origin/false advertising.  Here the court kicks out everything but some copyright infringement claims.
 
PIC licensed OSI to use photos of OSI products, with a non-exclusive, worldwide license to use, sublicense, and permit use, except that OSI couldn’t sublicense images “in exchange for valuable consideration such as a fee (e.g., as stock photography).” The licensing agreement also provided: “To the extent reasonably possible and practical, OSI shall … include a copyright notice indicating PIC as the copyright owner and/or include proper attribution indicating Paul Picone as the photographer for Images Used by OSI.”
 
Orgill is a wholesale distributor for OSI, and used product images from “e-mail, Dropbox, OSI’s external website, or OSI’s internal web server.” Whether Orgill knew about PIC’s license to OSI was disputed.  OSI conducted twice-yearly reviews of its product images for five years and never challenged the way OSI images appeared.  After PIC sued, OSI and Orgill executed a confirmatory copyright sublicense agreement, effective nunc pro tunc as of June 1, 2006.  The sublicensing agreement also included a provision obligating Orgill to include and instruct its sublicensees/dealers to include, “to the extent reasonably possible and practical with respect to size, prominence, aesthetics, and Use, a copyright notice indicating PIC as the copyright owner of the Images.”  It further covenanted not to remove any copyright notice before distributing images.
 
Farm & City Supply is one of Orgill’s dealers: Orgill uses an ecommerce platform that creates an online store, which dealers then brand and publish with their own names.  To do so, dealers pay a flat $750 setup fee and a monthly fee. Dealers can get pictures from the platform, including the PIC images, but it’s disputed whether these fees cover those pictures.  Orgill also has a product information library on an FTP server, from which dealers may download product images and other data after receiving a secure login.  There’s no additional fee for using the server. Farm & City got the images at issue both from the FTP server and the ecommerce platform.
 
For a time, Farm & City placed a watermark reading “farmandcitysupply” across the images appearing on its eBay storefront.
 
Defendants bore their burden of showing that OSI impliedly licensed Orgill’s use of the images, given their longstanding business practices and OSI’s repeated twice-yearly review of Orgill’s catalogues.  The remaining question was whether Orgill’s use of the challenged images exceeded the scope of that license, because OSI couldn’t give Orgill more rights than OSI itself had.  The PIC-OSI license barred sublicensing in exchange for valuable consideration, and required attribution “[t]o the extent reasonably possible and practical.” 
 
Disputed questions about the fee and attribution precluded summary judgment on infringement. As to the fee, the fact that Orgill provided free FTP access “does not diminish the fact that those images were available in another forum only following an initial payment.” Orgill argued that the fee it charged didn’t depend on how many images customers downloaded, or whether they downloaded images at all, but the fact that Farm & City paid the fee to get a bundle that included the images precluded summary judgment.  (I’m not entirely clear what legal standard the factfinder is supposed to use to resolve the dispute.)
 
As for attribution, defendants argued that it would not have been “reasonably possible and practical” to include attribution on the images, because Orgill typically “crop[s]” product images “for tighter fit.”  The court wasn’t impressed.  Since the lawsuit, Orgill includes some attribution on OSI images in the form of a “sidenote or footnote for images appearing on websites and in catalogs.” “While it may not be practical for the defendants to include PIC’s full-sized copyright notice, PIC need not demonstrate as much to defeat a motion for summary judgment.” It was enough to show that there was no attribution, but that defendants “have apparently been able to include at least some attribution since learning of PIC’s copyright interest in the images.”  There were also factual issues about whether Orgill knew of PIC’s existence and its copyright interest in the images before the lawsuit, which also precluded Orgill’s innocent infringement defense. [I assume further proceedings will address whether this breach of the license actually results in infringement, or just breach.]
 
On innocent infringement, Orgill submitted evidence that it had never heard of PIC until the onset of this lawsuit and that, at all relevant times, it believed its use of the images was licensed.  But Orgill’s testimony contradicted the terms of the sublicensing agreement, which purportedly codified the terms of a pre-existing agreement between Orgill and OSI, and which included a covenant to include “a copyright notice indicating PIC as the copyright owner of the Images.” [Comment: Yikes!  The confirmatory sublicense leaves Orgill worse off than it was with just an implied license!]  “Orgill cannot have its lightbulb and eat it, too – either it always knew that PIC existed and that there were certain limitations on its use of the images, or else Orgill did not then, and does not now, know of any such limitations.”  [Well, presumably it knows now.  I understand that the confirmatory sublicense was poorly drafted, but let’s get real—isn’t the most likely scenario that Orgill didn’t know that PIC existed, but believed that OSI had the right to allow it to use the OSI images, whatever their ultimate source?]
 
Farm & City, however, prevailed on its innocent infringement defense, limiting its potential liability for statutory damages:
 
Farm & City submitted undisputed evidence that it did not know PIC existed until this lawsuit was filed, that it obtained all of the images at issue from Orgill free of copyright markings, and that Orgill never advised it of any limitations on its use of the images. Moreover, since Farm & City was not party to the sublicensing agreement between OSI and Orgill, there is no indication whatsoever that it might have been aware of its duty to attribute the images to PIC.
 
PIC also alleged violation of §1202’s prohibition on the provision of false CMI. Farm & City allegedly violated 1202(a) by adding a watermark reading “farmandcitysupply” to some images for use in its eBay storefront. Further, PIC claimed that both defendants removed or altered PIC’s CMI in violation of § 1202(b) before distributing the images.
 
Farm & City prevailed as a matter of law.  “Farm & City prevails as a matter of law on this issue. To be liable for adding false CMI under § 1202(a), a defendant must intend to ‘induce, enable, facilitate, or conceal infringement.’”  Undisputed testimony explained that the watermark “allows whoever is buying the product to know that they’re buying it from Farm & City Supply,” thus helping to “differentiate yourself from other sellers” and “increase your sales and make money.”  PIC argued that this amounted to a claim of authorship of the photos, but even if so, “Farm & City did not intend to “induce, enable, facilitate, or conceal infringement,” since it did not know of PIC’s existence until this lawsuit was filed and was unaware that it had any attribution obligations.”
 
Nor did PIC submit evidence to support its claim of CMI removal.  There was no evidence that either defendant ever received images withCMI; rather, the record indicated the contrary.  PIC said that its photographer put PIC attribution with every image he gave to OSI, thus justifying the inference that the defendants removed the CMI. “Given the existence of a third party that has not been deposed and is otherwise absent from the case, it would be too speculative to infer that Orgill removed CMI,” and even more so with Farm & City.
 
PIC also alleged that Farm & City violated §43(a) by putting the “farmandcitysupply” watermark on the images, constituting false designation of origin and false advertising.
 
False designation of origin: No.  Dastar.  (I hope the court awards fees.  But it might not, because there are a few cases out there that egregiously misread Dastarand allow similar claims to proceed past a motion to dismiss, even though the pixels/bytes produced by Farm & City were not the pixels/bytes/images produced by PIC, which would be required for true reverse passing off under Dastar—Dastar directs our attention to the entity that produced the copy at issue (here Farm & City, at least with the assistance of eBay), and not to the entity that produced the initial creative work subsequently multiplied in copies.)  PIC argued that, by adding the watermark without otherwise changing the images, Farm & City engaged in mere repackaging of the images and thus in reverse passing off.  The court, despite its jarring willingness to entertain PIC’s argument, ultimately disagreed.  Dastar says that “origin of goods” refers to “the producer of the tangible goods that are offered for sale.” Nothing in Dastar “suggests that the Lanham Act provides a cause of action even where the misrepresentation in question did not concern the source of a tangible good for sale to the public.” 
 
The tangible good for sale here is OSI’s lightbulbs.  As Dastarheld, “[t]he consumer who buys a branded product does not automatically assume that the brand-name company is the same entity that came up with the idea for the product, or designed the product – and typically does not care whether it is. The words of the Lanham Act should not be stretched to cover matters that are typically of no consequence to consumers.”  Similarly, customers on eBay want to buy lightbulbs, and aren’t interested in the author of the product images. “There is no record evidence that any consumer believed that Farm & City’s watermark indicated ownership of the photographs that depicted the lightbulbs.”
 
False advertising: the court also joined the consensus that plaintiffs can’t save a Dastar-barred §43(a)(1)(A) merely by repleading the same facts under §43(a)(1)(B).   Authorship does not constitute part of the “nature, characteristics, or qualities” of a good for sale.
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