What Is the Academy’s Role in Evidence-based Policy Making for Intellectual Property?

Posted on June 16, 2015 by rtushnet
Hoover Institution & USPTO
 
Welcome:        Shira
Perlmutter, US Patent and Trademark Office
Initial Edison Scholars to help with evidence-based
policymaking—Peter Menell (claim construction) and Jay Thomas.  Jay Kesan: harmonization and cross-country
comparisons of patent examination.  In
2013, Congress and WH became interested in patent reform, and PTO expanded the
Edison program to study specific issues bearing on those topics—patent litigation
and potential abuse. Jonas Anderson: classifying and evaluating claim terms;
Joseph Bailey—refining prior art search through machine learning.  Deepak Hedge, to follow. We also brought in
Graeme Dinwoodie to look on whether TMs define rights to existing usage or to
economic expansions. Josh Sarnoff—continuation practice.
 
The Edison Scholar Program at the USPTO: Results and
Contributions
Moderator:      Tim
Simcoe, President’s Council of Economic Advisers and Boston University
 
Panelists: Joseph Bailey, University of Maryland
Spent 9 years as patent expert witness. Opportunity for understanding
office actions and what examiners are thinking from the inside out. His
research: how examiners can look at growing corpus of prior art through machine
learning.  Accelerating pace of
innovation.  Gone from patent no. 7
million to no. 9 million in 10 years—used to take 100 years. Number of
examiners hasn’t kept up.  Algorithms to
grow and learn from examiner activity. 
Examiners have become their own thesaurus—what other terms to search to
find relevant literature.  Can we imagine
algorithms working on behalf of examiners, or modifying algorithms taking best
practices into consideration? Able to get cooperation from examiners/union.
 
Examples of search strings used by examiners—truncating or
stemming words and synonyms: (website “web site” webpage “web page” internet
online) etc.  You may end up with
thousands of results even after a search that’s as refined as you think
possible.  By saving the search strings,
words used in applications can be stemmed and lemmatized, using examiners’
thesauri, to do that for them.  So then
we develop a nested thesaurus, where words have meaning w/in a particular
context and might differ in a different context.  (Folksonomy? I’m not enough of a librarian to
understand the relationships.)
 
Then, text mining of corpus of 400,000 granted patents from
2005-2014. By looking at use of words and # of instances of use, we can apply
thesauri, compare results, and filter for nearest neighbors.  Prior art may be far away or close, and we
need to decide how near it needs to be. We don’t want to present examiners with
all the best results, but rather a distribution of different results that come
from different clusters of the patents. 
Consider the closest but also these other clusters, which may lead to
different insights.
 
Supervised learning: the results are used or not used in
office actions by examiners.  Automated
pre-examination search?  Patent Office’s
March quality summit ended up with a proposal to investigate pre-examination
search to be sent to an examiner upon filing of an application.  [Relation to whether prior art is cited by
the applicant? I understand that examiners
don’t cite applicant-submitted prior art very much.]
 
Deepak Hegde, New York University: Aim: Getting smaller
inventors to specialize in invention, which they can then sell to
commercializers.  But media coverage is
that patents are used by trolls.  Growth
rates for patent litigation higher than growth in # of patents.  Some experts lay part of the blame on the examination
system.
 
Goal:establish systematic facts about quality and speed of
examination.  We don’t know what the idea
grant rate is; depends on quality of applications. So looked at changing
trends.  Substantial variation in
allowance rates across times—high of 80% in 1998 to around 45% by 2010,
creeping back up.  Is this a function of
changing examination standards?  Patent
pendency more than doubled between 1991 and 2010, coinciding with decrease in
allowance rates. 
 
Used a smaller sample to create the models.  Several factors increase examination delays
and decrease allowance rates significantly. Most seem inversely related:
factors that depress allowance rates increase time taken to issue final
decision.  Proportion of senior examiners:
more senior examiners = allowance rates up but pendency rates down.  Stock of pending applications: as the burden
increases, increase pendency times and decrease allowance rates. Some factors
work together: applications filed by small entities are more likely to have
terminal decision more quickly, but lower rate of allowance. One reason: as you
delay application process, smaller entities are more likely to abandon. Number
of claims: increases grants and probability of delays. 
 
Covariates, over which PTO has no control, explain 70% of
the variance in allowance rates, while year effects explain an additional 10%
(could be changing examination standards). 
 
Measures of quality: if an examiner makes a decision, if
that decision is subjected to a second round of scrutiny, what is the
probability that the decision will be upheld? Type 1/Type 2 errors: patents
taken to court and invalidated; applications rejected but allowed by BPIA/PTAB.  Examination errors do not show an increasing
trend.  They seem to be going down/more
or less flat with time.
 
Increasing delays aren’t necessarily bad; gives time to
applicants to figure out whether patent is worth investing in for
themselves.  Calls for reform based on
allegations of rubberstamping aren’t accurate. Litigation is driven by value of
property rights but also by their contestability.  Litigation might be increasing because of
increasing value of property rights; not the contestability which isn’t
increasing. Limited resources: PTO might invest more in reducing errors than in
reducing time to final decision, because time helps applicants self-select.  Further research: examine effects of PTO
internal managerment; examine role of patent publication in reducing errors;
examine role of patents in securing investment capital.
 
Joshua Sarnoff, DePaul University: What happens to patent
scope during prosecution?   Test minimum
and average independent claim lengths, and independent claim counts, with idea
that length is a measure of how narrow the claim is, and so change in scope can
be measured by change during application pendency. Same w/claim numbers: more
claims, broader patents. Measured subgroups of technologies, and measured
against pendency.
 
Applications that are ultimately issued and applications
that are ultimately abandoned—number of words in smallest independent claim
shows that patents that go abandoned after publication tend to have more claims
that have fewer words. Broader claims/fewer words are less likely to get
granted.  Change length to grant—claims at
publication, for those claims that will ultimately get issued—as you go from
application to grant, entire distribution gets pushed out, suggesting that
prosecution is narrowing claims by expanding claim length.The tail spike of
very small claims gets completely eliminated in the grant lengths.
 
Claim count: claims before applications that are abandoned
tend to have fewer independent claims, particularly one independent claim. When
you move between publication and grant, you see a higher density of single
independent claims—dropping claims/narrowing scope as you go forward.  Doesn’t tell us much about continuation
practice though. 
 
Similar results broken up by type of industry.  Chemical/drugs/medical: you have many more
shorter claims than other fields b/c they often claim single chemicals.  Claim counts and continuations: claim counts
go down by about .5 each round. Makes some sense, though it doesn’t answer
ultimate question of validity. Continuation practice doesn’t let the exact same
claims survive multiple rounds.  Will
publish datasets and summary analysis; will be running further regressions and
hope to match against validity indicators.
 
Points out that it is difficult to record all this data—we’re
asking examiners to do a lot.
 
Q: what’s the overall state of the academic literature about
the patent system?
 
Bailey: there’s incredible talent at the PTO.
 
Sarnoff: fairly good doctrinal scholarship; law and
economics began penetration of empirical methods, increasing significantly.
Clamor for more empirical analysis that is very hard to do.  Part of the reason it’s hard to do is that we
need political decisions to collect the data, which has costs.  If the political will is there, you’ll see
even more empirical analysis—could be in courts too.
 
Simcoe: Where costs of data access are low, you’ll see a lot
of scholarship, most of it not great and some fantastic.  We’ve had a lot of studies over past 2
decades looking at existing patents changing the institutional regime—valid to
invalid, price to free.  Input demand
slopes down: when it becomes more available, it’s more likely to get built on.
We have much less info on up-front incentives—first invention in the chain and
whether/how patent stimulates that.  Even
with all the data we want that might be difficult.
 
Q: ex ante, how do you measure value of patent?
 
Hegde: more a mental model—litigation increases with
expected benefits, which are a product of value expected x chance you will win
if you litigate.  (x risk tolerance, for
example when someone adopts patent litigation as a business model.)  Increase in litigation could be driven by any
of these factors (or relative change in payoff from other forms of litigation!),
but no direct way in which he measured.
 
RT: For Prof. Bailey: are applicant citations incorporated
into the model in any way?  I know there’s
reason to think examiners don’t use applicant citations very much. Can you
perform any validity check by what an examiner ultimately might cite in a
rejection or limitation?
 
Bailey: doesn’t look at application citations; discussed
w/examiners and that’s a little too noisy to use.  Also, it would be great to include ultimate
citations but not in the model right now.
 
Q: what constraints did the PTO put on you?  Replicability—can it be repeated by those
outside the PTO, publication review?
 
Sarnoff: one of the premises of this research is to get the
entire dataset out for replication. These are limited resources; the PTO has
many demands on its time, so more access will be really helpful.
 
Bailey: 12,000 employees, 8600 examiners.  A lot of institutional inertia, not used to
academics floating around.  Biggest thing
for him: he was passionate about what he wanted to do, and eventually managed
to interest others.  Push to improve
patent quality = he was there at the right time.

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What Is the Academy’s Role in Evidence-based Policy Making for Intellectual Property?

Posted on June 16, 2015 by rtushnet
Hoover Institution & USPTO
 
Welcome:        Shira Perlmutter, US Patent and Trademark Office
Initial Edison Scholars to help with evidence-based policymaking—Peter Menell (claim construction) and Jay Thomas.  Jay Kesan: harmonization and cross-country comparisons of patent examination.  In 2013, Congress and WH became interested in patent reform, and PTO expanded the Edison program to study specific issues bearing on those topics—patent litigation and potential abuse. Jonas Anderson: classifying and evaluating claim terms; Joseph Bailey—refining prior art search through machine learning.  Deepak Hedge, to follow. We also brought in Graeme Dinwoodie to look on whether TMs define rights to existing usage or to economic expansions. Josh Sarnoff—continuation practice.
 
The Edison Scholar Program at the USPTO: Results and Contributions
Moderator:      Tim Simcoe, President’s Council of Economic Advisers and Boston University
 
Panelists: Joseph Bailey, University of Maryland
Spent 9 years as patent expert witness. Opportunity for understanding office actions and what examiners are thinking from the inside out. His research: how examiners can look at growing corpus of prior art through machine learning.  Accelerating pace of innovation.  Gone from patent no. 7 million to no. 9 million in 10 years—used to take 100 years. Number of examiners hasn’t kept up.  Algorithms to grow and learn from examiner activity.  Examiners have become their own thesaurus—what other terms to search to find relevant literature.  Can we imagine algorithms working on behalf of examiners, or modifying algorithms taking best practices into consideration? Able to get cooperation from examiners/union.
 
Examples of search strings used by examiners—truncating or stemming words and synonyms: (website “web site” webpage “web page” internet online) etc.  You may end up with thousands of results even after a search that’s as refined as you think possible.  By saving the search strings, words used in applications can be stemmed and lemmatized, using examiners’ thesauri, to do that for them.  So then we develop a nested thesaurus, where words have meaning w/in a particular context and might differ in a different context.  (Folksonomy? I’m not enough of a librarian to understand the relationships.)
 
Then, text mining of corpus of 400,000 granted patents from 2005-2014. By looking at use of words and # of instances of use, we can apply thesauri, compare results, and filter for nearest neighbors.  Prior art may be far away or close, and we need to decide how near it needs to be. We don’t want to present examiners with all the best results, but rather a distribution of different results that come from different clusters of the patents.  Consider the closest but also these other clusters, which may lead to different insights.
 
Supervised learning: the results are used or not used in office actions by examiners.  Automated pre-examination search?  Patent Office’s March quality summit ended up with a proposal to investigate pre-examination search to be sent to an examiner upon filing of an application.  [Relation to whether prior art is cited by the applicant? I understand that examiners don’t cite applicant-submitted prior art very much.]
 
Deepak Hegde, New York University: Aim: Getting smaller inventors to specialize in invention, which they can then sell to commercializers.  But media coverage is that patents are used by trolls.  Growth rates for patent litigation higher than growth in # of patents.  Some experts lay part of the blame on the examination system.
 
Goal:establish systematic facts about quality and speed of examination.  We don’t know what the idea grant rate is; depends on quality of applications. So looked at changing trends.  Substantial variation in allowance rates across times—high of 80% in 1998 to around 45% by 2010, creeping back up.  Is this a function of changing examination standards?  Patent pendency more than doubled between 1991 and 2010, coinciding with decrease in allowance rates. 
 
Used a smaller sample to create the models.  Several factors increase examination delays and decrease allowance rates significantly. Most seem inversely related: factors that depress allowance rates increase time taken to issue final decision.  Proportion of senior examiners: more senior examiners = allowance rates up but pendency rates down.  Stock of pending applications: as the burden increases, increase pendency times and decrease allowance rates. Some factors work together: applications filed by small entities are more likely to have terminal decision more quickly, but lower rate of allowance. One reason: as you delay application process, smaller entities are more likely to abandon. Number of claims: increases grants and probability of delays. 
 
Covariates, over which PTO has no control, explain 70% of the variance in allowance rates, while year effects explain an additional 10% (could be changing examination standards). 
 
Measures of quality: if an examiner makes a decision, if that decision is subjected to a second round of scrutiny, what is the probability that the decision will be upheld? Type 1/Type 2 errors: patents taken to court and invalidated; applications rejected but allowed by BPIA/PTAB.  Examination errors do not show an increasing trend.  They seem to be going down/more or less flat with time.
 
Increasing delays aren’t necessarily bad; gives time to applicants to figure out whether patent is worth investing in for themselves.  Calls for reform based on allegations of rubberstamping aren’t accurate. Litigation is driven by value of property rights but also by their contestability.  Litigation might be increasing because of increasing value of property rights; not the contestability which isn’t increasing. Limited resources: PTO might invest more in reducing errors than in reducing time to final decision, because time helps applicants self-select.  Further research: examine effects of PTO internal managerment; examine role of patent publication in reducing errors; examine role of patents in securing investment capital.
 
Joshua Sarnoff, DePaul University: What happens to patent scope during prosecution?   Test minimum and average independent claim lengths, and independent claim counts, with idea that length is a measure of how narrow the claim is, and so change in scope can be measured by change during application pendency. Same w/claim numbers: more claims, broader patents. Measured subgroups of technologies, and measured against pendency.
 
Applications that are ultimately issued and applications that are ultimately abandoned—number of words in smallest independent claim shows that patents that go abandoned after publication tend to have more claims that have fewer words. Broader claims/fewer words are less likely to get granted.  Change length to grant—claims at publication, for those claims that will ultimately get issued—as you go from application to grant, entire distribution gets pushed out, suggesting that prosecution is narrowing claims by expanding claim length.The tail spike of very small claims gets completely eliminated in the grant lengths.
 
Claim count: claims before applications that are abandoned tend to have fewer independent claims, particularly one independent claim. When you move between publication and grant, you see a higher density of single independent claims—dropping claims/narrowing scope as you go forward.  Doesn’t tell us much about continuation practice though. 
 
Similar results broken up by type of industry.  Chemical/drugs/medical: you have many more shorter claims than other fields b/c they often claim single chemicals.  Claim counts and continuations: claim counts go down by about .5 each round. Makes some sense, though it doesn’t answer ultimate question of validity. Continuation practice doesn’t let the exact same claims survive multiple rounds.  Will publish datasets and summary analysis; will be running further regressions and hope to match against validity indicators.
 
Points out that it is difficult to record all this data—we’re asking examiners to do a lot.
 
Q: what’s the overall state of the academic literature about the patent system?
 
Bailey: there’s incredible talent at the PTO.
 
Sarnoff: fairly good doctrinal scholarship; law and economics began penetration of empirical methods, increasing significantly. Clamor for more empirical analysis that is very hard to do.  Part of the reason it’s hard to do is that we need political decisions to collect the data, which has costs.  If the political will is there, you’ll see even more empirical analysis—could be in courts too.
 
Simcoe: Where costs of data access are low, you’ll see a lot of scholarship, most of it not great and some fantastic.  We’ve had a lot of studies over past 2 decades looking at existing patents changing the institutional regime—valid to invalid, price to free.  Input demand slopes down: when it becomes more available, it’s more likely to get built on. We have much less info on up-front incentives—first invention in the chain and whether/how patent stimulates that.  Even with all the data we want that might be difficult.
 
Q: ex ante, how do you measure value of patent?
 
Hegde: more a mental model—litigation increases with expected benefits, which are a product of value expected x chance you will win if you litigate.  (x risk tolerance, for example when someone adopts patent litigation as a business model.)  Increase in litigation could be driven by any of these factors (or relative change in payoff from other forms of litigation!), but no direct way in which he measured.
 
RT: For Prof. Bailey: are applicant citations incorporated into the model in any way?  I know there’s reason to think examiners don’t use applicant citations very much. Can you perform any validity check by what an examiner ultimately might cite in a rejection or limitation?
 
Bailey: doesn’t look at application citations; discussed w/examiners and that’s a little too noisy to use.  Also, it would be great to include ultimate citations but not in the model right now.
 
Q: what constraints did the PTO put on you?  Replicability—can it be repeated by those outside the PTO, publication review?
 
Sarnoff: one of the premises of this research is to get the entire dataset out for replication. These are limited resources; the PTO has many demands on its time, so more access will be really helpful.
 
Bailey: 12,000 employees, 8600 examiners.  A lot of institutional inertia, not used to academics floating around.  Biggest thing for him: he was passionate about what he wanted to do, and eventually managed to interest others.  Push to improve patent quality = he was there at the right time.
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Apples-to-oranges comparison is literally false, justifies finding of irreparable harm

Posted on June 16, 2015 by rtushnet
Market Track, LLC v. Efficient Collaborative Retail
Marketing, LLC, 2015 WL 3637740, No. 14 C 4957 (N.D. Ill. June 11, 2015)
 
Market Track provides business intelligence services,
principally tracking and analyzing information relating to consumer
advertising. ECRM is Market Track’s principal competitor in the ad tracking
business. After ECRM began competing directly with Market Track, some of Market
Track’s customers switched to ECRM’s ad tracking product, while others were
able to negotiate lower prices from Market Track’s products and services.
 
Market Track sued for patent infringement, tortious
interference, and false advertising.  The
court invalidated the patent, titled “Automatic Creation of Output Files from
Images in Database,” as too abstract under Alice/Mayo. 
The tortious interference with contract claims were preempted by the
Illinois Trade Secret Act, because they depended on allegations of
misappropriation, defined to include “breach or inducement of a breach of a
confidential relationship or other duty to maintain secrecy or limit use.”  Moreover, Market Track failed to show harm
from any breach. Its claimed loss of market share, price erosion, and loss of
customer goodwill couldn’t be causally linked to any contractual interference,
as opposed to alleged patent infringement or other factors.  For example, a 2014 Market Track study found
that, despite the fact that ECRM’s data was inferior to Market Track’s in terms
of coverage, granularity, and completeness, ECRM’s user interface was more appealing,
ECRM’s customer service satisfaction was higher, ECRM had a reputation of being
more innovative, and ECRM’s pricing was lower than Market Track’s.
 
Market Track also couldn’t get a preliminary injunction on
most of its Lanham Act/state law deceptive trade practices claims, but did win
on one.  Market Track challenged seven
ECRM statements, particularly a slide featuring a side-by-side juxtaposition of
“Leading Competitor Coverage” of “Top 50 Advertising DMA’s” next to “ECRM Data
Coverage” of “Over 65,000 Stores” and “100% Census Coverage”:
 

ECRM didn’t dispute that this slide qualified as
advertising, but the other challenged statements were in emails to potential
customers: ECRM represented that Market Track double-counts ads in its own
data, and that ECRM has converted a high number of Market Track’s existing
customers to the ECRM service. Market Track said that these statements are
false, because it employs sophisticated techniques to avoid double counting ads
in its data, and because its own records show that fewer than 80 clients have
switched from Market Track to ECRM. However, the emails weren’t pervasive
enough to count as “commercial advertising or promotion” under the Lanham Act,
and the parties agreed that the Illinois Deceptive Trade Practices Act used the
same standards (though I would say that “commercial advertising or promotion”
is usually a point of departure for state statutes, which after all are usually
configured to allow individual consumers to sue for misrepresentations made to
them).  Under the Lanham Act, “private
one-to-one communications do not constitute ‘commercial advertising or promotion’
unless systematically communicated to a substantial portion of the relevant
market for a product, and Market Track’s 850 customers meant that two emails
that accuse Market Track of “double counting” and four emails that overstated
the number of clients who switched were more like isolated one-to-one
communications.
 
The slide remained. 
Market Track argued literal falsity, because its coverage area was
substantially larger than the graphic depicted. 
ECRM responded that the slide didn’t literally identify Market Track as
the “leading competitor” or literally say that Market Track only tracked 50
designated market areas (DMAs).  But the
other slides in the presentation did identify Market Track as the leading competitor,
and arguably the sole competitor.  Any
viewer would understand the reference to Market Track.  Moreover, the slide was literally false: the
standard is not a full statement of an untruth in words, but “a showing that
the challenged statement is unambiguous and could not reasonably be understood
to mean anything different.”  The graphic
offered a misleading juxtaposition, like other misleading comparisons found to
be literally false.  The side-by-side
maps “unambiguously communicate that the two maps are intended to be an
apples-to-apples comparison of objective fact.” 
The unavoidable conclusion was that ECRM’s coverage was complete, down
to individual stores, while Market Track’s coverage was far less complete. 
 
ECRM argued that it was just stating “that competitor
products generally collect only one sample retailer ad per DMA rather than many
ads from all stores over the entire area of a DMA.”  But that didn’t make sense. First, Market
Track’s map was arbitrarily capped at the “Top 50” DMAs, rather than the “more
than 200” DMAs tracked by Market Track.  Second, the Market Track data “inexplicably
consolidates all retailers (up to 1500) of any given DMA into a single dot on
the ‘competitor’ side but not the ECRM side.” 
Third, each “sample retailer ad” was represented by an identically sized
dot on the maps, “inviting the conclusion that the each dot represents an identical
geographical footprint.” As a result, rather than conveying a message of more
granular coverage, the slide misrepresented that ECRM’s data covered 1300 times
the geographic area as Market Track, and that Market Track didn’t offer
granularity at the retailer level.
 
Literal falsity allows deception to be presumed, and this
claim is obviously material.  Moreover, “disparaging
false statements about a competitor’s product, especially when the relevant
market is nearly entirely occupied by two competitors, harms the competitor’s
goodwill and competitive position.”  These are cognizable injuries under the Lanham
Act, “even absent a showing of business loss,” because “it is virtually
impossible to ascertain the precise economic consequences” of such harms.  Because plaintiffs need not show business
loss, the causation problems afflicting the tortious interference claim didn’t
apply here. “Market Track would be hard pressed to identify lost customers or
price erosion specifically attributable to false advertising, either, but
Market Track has identified separate injuries–to reputation and goodwill–which
naturally flow from false advertising and support the Lanham Act claim.”
 
Does eBay allow a
resulting presumption of irreparable harm? Cases in the Northern District of
Illinois continued to apply that presumption, but only one of them even cited eBay, without discussing its
implications for Lanham Act cases. Out of an abundance of caution, the court
didn’t apply a blanket presumption. 
Because the challenged conduct was “a literally false statement
disparaging the leading competitor in a market primarily shared by two
competitors,” about a material fact (coverage) which was precisely where Market
Track claimed a competitive advantage over ECRM, the court found irreparable
injury likely.
 
With that out of the way, the balance of hardships and the
public interest also weighed in favor of issuing an injunction against using
the slide or substantially similar graphics. ECRM’s voluntary cessation meant
an injunction wouldn’t burden it but didn’t moot the case.

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Apples-to-oranges comparison is literally false, justifies finding of irreparable harm

Posted on June 16, 2015 by rtushnet
Market Track, LLC v. Efficient Collaborative Retail Marketing, LLC, 2015 WL 3637740, No. 14 C 4957 (N.D. Ill. June 11, 2015)
 
Market Track provides business intelligence services, principally tracking and analyzing information relating to consumer advertising. ECRM is Market Track’s principal competitor in the ad tracking business. After ECRM began competing directly with Market Track, some of Market Track’s customers switched to ECRM’s ad tracking product, while others were able to negotiate lower prices from Market Track’s products and services.
 
Market Track sued for patent infringement, tortious interference, and false advertising.  The court invalidated the patent, titled “Automatic Creation of Output Files from Images in Database,” as too abstract under Alice/Mayo.  The tortious interference with contract claims were preempted by the Illinois Trade Secret Act, because they depended on allegations of misappropriation, defined to include “breach or inducement of a breach of a confidential relationship or other duty to maintain secrecy or limit use.”  Moreover, Market Track failed to show harm from any breach. Its claimed loss of market share, price erosion, and loss of customer goodwill couldn’t be causally linked to any contractual interference, as opposed to alleged patent infringement or other factors.  For example, a 2014 Market Track study found that, despite the fact that ECRM’s data was inferior to Market Track’s in terms of coverage, granularity, and completeness, ECRM’s user interface was more appealing, ECRM’s customer service satisfaction was higher, ECRM had a reputation of being more innovative, and ECRM’s pricing was lower than Market Track’s.
 
Market Track also couldn’t get a preliminary injunction on most of its Lanham Act/state law deceptive trade practices claims, but did win on one.  Market Track challenged seven ECRM statements, particularly a slide featuring a side-by-side juxtaposition of “Leading Competitor Coverage” of “Top 50 Advertising DMA’s” next to “ECRM Data Coverage” of “Over 65,000 Stores” and “100% Census Coverage”:
 

ECRM didn’t dispute that this slide qualified as advertising, but the other challenged statements were in emails to potential customers: ECRM represented that Market Track double-counts ads in its own data, and that ECRM has converted a high number of Market Track’s existing customers to the ECRM service. Market Track said that these statements are false, because it employs sophisticated techniques to avoid double counting ads in its data, and because its own records show that fewer than 80 clients have switched from Market Track to ECRM. However, the emails weren’t pervasive enough to count as “commercial advertising or promotion” under the Lanham Act, and the parties agreed that the Illinois Deceptive Trade Practices Act used the same standards (though I would say that “commercial advertising or promotion” is usually a point of departure for state statutes, which after all are usually configured to allow individual consumers to sue for misrepresentations made to them).  Under the Lanham Act, “private one-to-one communications do not constitute ‘commercial advertising or promotion’ unless systematically communicated to a substantial portion of the relevant market for a product, and Market Track’s 850 customers meant that two emails that accuse Market Track of “double counting” and four emails that overstated the number of clients who switched were more like isolated one-to-one communications.
 
The slide remained.  Market Track argued literal falsity, because its coverage area was substantially larger than the graphic depicted.  ECRM responded that the slide didn’t literally identify Market Track as the “leading competitor” or literally say that Market Track only tracked 50 designated market areas (DMAs).  But the other slides in the presentation did identify Market Track as the leading competitor, and arguably the sole competitor.  Any viewer would understand the reference to Market Track.  Moreover, the slide was literally false: the standard is not a full statement of an untruth in words, but “a showing that the challenged statement is unambiguous and could not reasonably be understood to mean anything different.”  The graphic offered a misleading juxtaposition, like other misleading comparisons found to be literally false.  The side-by-side maps “unambiguously communicate that the two maps are intended to be an apples-to-apples comparison of objective fact.”  The unavoidable conclusion was that ECRM’s coverage was complete, down to individual stores, while Market Track’s coverage was far less complete. 
 
ECRM argued that it was just stating “that competitor products generally collect only one sample retailer ad per DMA rather than many ads from all stores over the entire area of a DMA.”  But that didn’t make sense. First, Market Track’s map was arbitrarily capped at the “Top 50” DMAs, rather than the “more than 200” DMAs tracked by Market Track.  Second, the Market Track data “inexplicably consolidates all retailers (up to 1500) of any given DMA into a single dot on the ‘competitor’ side but not the ECRM side.”  Third, each “sample retailer ad” was represented by an identically sized dot on the maps, “inviting the conclusion that the each dot represents an identical geographical footprint.” As a result, rather than conveying a message of more granular coverage, the slide misrepresented that ECRM’s data covered 1300 times the geographic area as Market Track, and that Market Track didn’t offer granularity at the retailer level.
 
Literal falsity allows deception to be presumed, and this claim is obviously material.  Moreover, “disparaging false statements about a competitor’s product, especially when the relevant market is nearly entirely occupied by two competitors, harms the competitor’s goodwill and competitive position.”  These are cognizable injuries under the Lanham Act, “even absent a showing of business loss,” because “it is virtually impossible to ascertain the precise economic consequences” of such harms.  Because plaintiffs need not show business loss, the causation problems afflicting the tortious interference claim didn’t apply here. “Market Track would be hard pressed to identify lost customers or price erosion specifically attributable to false advertising, either, but Market Track has identified separate injuries–to reputation and goodwill–which naturally flow from false advertising and support the Lanham Act claim.”
 
Does eBay allow a resulting presumption of irreparable harm? Cases in the Northern District of Illinois continued to apply that presumption, but only one of them even cited eBay, without discussing its implications for Lanham Act cases. Out of an abundance of caution, the court didn’t apply a blanket presumption.  Because the challenged conduct was “a literally false statement disparaging the leading competitor in a market primarily shared by two competitors,” about a material fact (coverage) which was precisely where Market Track claimed a competitive advantage over ECRM, the court found irreparable injury likely.
 
With that out of the way, the balance of hardships and the public interest also weighed in favor of issuing an injunction against using the slide or substantially similar graphics. ECRM’s voluntary cessation meant an injunction wouldn’t burden it but didn’t moot the case.
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Seventh Circuit engages in target practice on descriptive fair use

Posted on June 15, 2015 by rtushnet
Sorensen v. WD-40 Co., No. 14-3067, 2015 BL 184918 (7th Cir.
June 11, 2015)
 
The Seventh Circuit continues its pattern of telling
district judges just to eyeball cases in the expectation that they’ll be good
enough to get it right most of the time. Honestly, given how elaborate
trademark defenses have gotten, I’m not sure this is the wrong thing to do, but
it sure puts a premium on sharing common sense with federal judges.
 
Sorenson is the founder and CEO of Inhibitor Technology Corporation,
which produces a line of rust-inhibiting products containing a substance called
volatile corrosion inhibitor (VCI), sold under the incontestably registered
term THE INHIBITOR. Sorensen also claims common law trademark rights in an
orange-and-black crosshair.  Sorensen
sold a variety of products containing VCI, and generally targeted his sales at
firearm, fishing, and hunting enthusiasts, as well as members of the military.
 

WD-40 introduced a new product line, the WD-40 Specialist,
and one of its products—WD-40 Specialist Long-Term Corrosion Inhibitor, which
contains VCI and has a purpose similar to that of Sorensen’s products—contains on
its packaging both the word “inhibitor” and an orange crosshair. (WD-40
registered a simple black-and-white crosshair design, which appeared
differently on each product.)  WD-40
marketed its specialist products to tradesmen, industrial consumers, auto
consumers, construction workers, and maintenance workers, with the greatest
focus on the auto industry.  WD-40 denied
previous knowledge of Sorenson’s mark, though it did consider forming a
partnership with Sorenson’s former company and some documents indicated that
someone at the ad agency had identified Sorenson’s company.
 

Sorensen sued. The court of appeals affirmed a grant of
summary judgment in favor of WD-40.
 
The court found that WD-40’s use of “inhibitor” was descriptive
fair use.  The district court reasoned
that the word could not function as a source indicator because the Long-Term
Corrosion Inhibitor bottle also displays the famous WD-40 shield, serving as
the source indicator. The court of appeals disagreed, because products can
contain more than one indicator of source. 
Nor did WD-40’s omission of “the” matter, because, “[h]ad WD-40 called
its product ‘Inhibitor’ and placed that word in large, bold letters on its can,
we think it probable that a jury would find that to be trademark use, despite
the lack of the word ‘the.’” Nor did the presence on the market of other
products using the word “inhibitor” indicate lack of trademark use, because
that just shows descriptiveness, and descriptive terms can be used as
marks.  (One would think that widespread
use would nonetheless offer some evidence of how to bet in any given case, not
least because widespread use makes it harder for any given instance to acquire
trademark meaning.)  Moreover, it didn’t
matter that WD-40 used “inhibitor” on only one product, rather than every
product in the line.  The converse wasn’t
true: “Sorensen’s argument would be much stronger if ‘inhibitor’ appeared on
all of the products in the Specialist line.” But a mark can be a mark for just
one product in a larger line.
 
Nonetheless, the court of appeals agreed that WD-40 made
non-trademark use of the term, because look at it (interjectionary
complement because):
 
Compared to other features in the
bottle’s design, the word “inhibitor” is much less prominent or noticeable. It
is much smaller than the bright and eye-catching WD-40 shield. It is also
smaller than the stylized and colored word “Specialist” and the colorful
crosshair mark. Finally, the word “inhibitor”—which is written in relatively
small, white type—is less attention-grabbing than even the word “Corrosion,”
which is larger and colored in orange. Due to the word’s small size, plain
color, and non-privileged placement on the bottle, we find that “inhibitor” is
not an “attention-getting symbol,” and does not function as a source indicator.
 
Although WD-40’s communications guide required that
employees and ads use the full name of the product, “WD-40 Specialist Long-Term
Corrosion Inhibitor,” that didn’t mean that each individual word in the name
served as a mark.
 
There was no doubt that “inhibitor” was descriptive of WD-40’s
product, as the multiple competing uses showed. Further, WD-40 used the word
multiple times on its bottle in a manner that was clearly non-source
identifying.  Even if “inhibitor”
required some imagination, the product was a “corrosion inhibitor,” which
required no imagination to understand. 
This wasn’t inconsistent with Fortune Dynamic, Inc. v. Victoria’s
Secret, 618 F.3d 1025 , 1035 (9th Cir. 2010), which sent the question of
whether the trademarked term DELICIOUS was being used in a descriptive sense to
a jury.  There, “delicious” was used as a
mark for women’s shoes (actually, that’s the plaintiff’s mark, not the
defendant’s use, which was on shirts), and not for a food or beverage. If “Corrosion
Inhibitor” appeared on a t-shirt, the court of appeals might’ve ruled
differently.  (Though it shouldn’t
have.  Suppose Sorenson distributes
promotional goods such as T-shirts for his products, and so does WD-40.  The result in this case should be no
different.)
 
Finally, no reasonable jury could find bad faith. There was
evidence that WD-40 had knowledge of Sorenson’s product; even though there was
no evidence that the marketing department, which decided on the name, had that
knowledge, a jury could infer that someone with decision-making authority did
know. But knowledge is insufficient to show bad faith—the plaintiff needed
something more suggesting subjective
bad faith. Failing to conduct an investigation can sometimes support an
inference of bad faith.  But if WD-40
believed that it wasn’t using the word “inhibitor” as a mark, it had no reason
to conduct a trademark search. Plus, a theory of failure to investigate is
inconsistent with Sorenson’s theory of guilty knowledge.
 
Turning to the crosshair: the analysis shouldn’t zoom in on
the crosshairs alone, but on the labeling as a whole.  Consumers looking at the entirety of the
labels wouldn’t be confused as to source. “The WD-40 bottles are primarily
black and silver, with a large yellow WD-40 shield and a bright yellow cap. The
packaging of Sorensen’s products, in contrast, is primarily orange,
yellow-orange, and black.” Even the crosshairs were quite different: “WD-40’s
silver and burnt orange crosshair, with silver symbols shaded to show depth,
creates a different impression than Sorensen’s bright orange-and-black
crosshair, which features two-dimensional symbols that are silhouettes.”  Their relative size and label placement were
different—usually the crosshair appeared as the “O” in Sorenson’s “Inhibitor,”
not as a free-standing mark near the bottom of the bottle, like on the
Specialist products. “Simply put, the overall commercial impression of the two
bottles is quite distinct.”
 
Further, the prominent display of WD-40’s own well-known
marks was a strong indication of lack of likely confusion.  Sorenson first argued that this gave owners
of strong marks carte blanche to infringe. 
But trademark law “exists primarily to protect consumers, not only the
holder of the trademark.”  And Sorenson
could have brought a reverse confusion claim, but didn’t.  Sorenson argued that consumers would think
the companies were co-branding, or that Sorenson had consented to the use.  But that theory makes more sense when the
senior user’s mark is much stronger than the junior user’s, “lending
credibility to the theory that the junior user was trying to feed off of the
senior user’s goodwill.”
 
The use of an especially strong house mark can “greatly
lessen the likelihood of confusion,” but “it may not wholly eliminate the
possibility that consumers will believe a product to be cross-branded.”  (Ahem. 
The standard, of course, is not possibility but likelihood.)  The strength of the senior user’s mark
relative to the junior user’s mark affects that possibility; the weakness of
Sorenson’s crosshair mark made it unlikely that consumers would think the
well-known WD-40 brand was cross-branding with Sorenson.  The other key consideration is the comparison
between the senior mark and the image on the junior user’s product.  “If cross-branding were indeed occurring, the
junior user would likely use an exact copy of the senior user’s mark, and probably
the name of the senior user’s product as well.” Not so here. “If cross-branding
were occurring, the junior user would seek to make it as clear as possible; it
would not use a significantly different form of a seldom-used logo.”
 
Similarity of the products: two of the products were
functionally identical, favoring Sorenson, and the court of appeals found that “consumers
might very well expect Sorensen, as the producer of rust-preventive products,
to expand his product line into the types of sprays included in the Specialist
line,” even sprays that don’t contain VCI. The fact that Sorensen’s current
products all contain VCI was “minimally relevant,” since WD-40’s own product
line showed that companies might make both VCI-containing and VCI-free
products.
 
However, the area and manner of concurrent use/channels of
commerce/targeted consumers didn’t help Sorenson much.  There was no evidence that the parties’
products had ever been sold side by side, targeted the same consumers,
advertised through the same channels, or shown at the same trade show in the
same year.  A jury could make limited
inferences in Sorenson’s favor, since both parties’ products were sold in one
store (albeit in different sections, and Sorenson’s VCI oils and sprays—the most
similar products—weren’t sold at that store). “And, though there is no evidence
that WD-40 specifically markets to Sorensen’s target audience—hunters and
fishermen—that is somewhat beside the point, as WD-40 effectively targets all
consumers.” A jury could also find that WD-40 specifically targets members of
the military by selling to companies that supply military commissaries.  Still, this only weakly supported Sorenson.
 
As for degree of care, the parties’ products were “quite
inexpensive (under $12), and could even be characterized as impulse purchases.”  Though WD-40 argued that its customers sought
out its famous brand, that didn’t matter to the relevant consumers—those who
sought to buy Sorenson’s products or would consider them, and who were misled
into buying a Specialist product.
 
Strength of the mark: Sorenson didn’t offer consumer surveys
or testimony about consumer awareness of the crosshair mark, or sales data “showing
that products bearing the mark are so widely sold that a jury could infer that
many consumers are aware of the mark.” Sorenson’s biggest problem was
inconsistent use of the mark, which makes a symbol less helpful as a source
indicator and therefore weaker.  The
crosshair had been in use since 1997, but “inconsistently—sometimes the
crosshair has symbols in each quadrant, sometimes the quadrants are empty, and
many times there is no crosshair at all, but rather a bull’s eye.” This factor
aided WD-40. 
 
There was no evidence of actual confusion, and no evidence
of a bad faith intent to pass off WD-40’s product as having come from Sorenson,
even though a jury could find that WD-40 knew of the crosshair. There was no
evidence that the design firm that first designed the WD-40 crosshair had any
knowledge of Sorensen’s mark, and the presence of the WD-40 shield on the
products suggested a lack of bad faith.
 
The factors that favored Sorenson were not enough to create
a material dispute of fact on the ultimate question of likely confusion.  The three most important factors—similarity of
the marks, bad faith intent, and actual confusion—pointed “decisively” in favor
of WD-40, especially dissimilarity of the marks. The “clear weakness” of
Sorenson’s marks was also “central” to the court’s conclusion.
 

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Seventh Circuit engages in target practice on descriptive fair use

Posted on June 15, 2015 by rtushnet
Sorensen v. WD-40 Co., No. 14-3067, 2015 BL 184918 (7th Cir. June 11, 2015)
 
The Seventh Circuit continues its pattern of telling district judges just to eyeball cases in the expectation that they’ll be good enough to get it right most of the time. Honestly, given how elaborate trademark defenses have gotten, I’m not sure this is the wrong thing to do, but it sure puts a premium on sharing common sense with federal judges.
 
Sorenson is the founder and CEO of Inhibitor Technology Corporation, which produces a line of rust-inhibiting products containing a substance called volatile corrosion inhibitor (VCI), sold under the incontestably registered term THE INHIBITOR. Sorensen also claims common law trademark rights in an orange-and-black crosshair.  Sorensen sold a variety of products containing VCI, and generally targeted his sales at firearm, fishing, and hunting enthusiasts, as well as members of the military.
 

WD-40 introduced a new product line, the WD-40 Specialist, and one of its products—WD-40 Specialist Long-Term Corrosion Inhibitor, which contains VCI and has a purpose similar to that of Sorensen’s products—contains on its packaging both the word “inhibitor” and an orange crosshair. (WD-40 registered a simple black-and-white crosshair design, which appeared differently on each product.)  WD-40 marketed its specialist products to tradesmen, industrial consumers, auto consumers, construction workers, and maintenance workers, with the greatest focus on the auto industry.  WD-40 denied previous knowledge of Sorenson’s mark, though it did consider forming a partnership with Sorenson’s former company and some documents indicated that someone at the ad agency had identified Sorenson’s company.
 

Sorensen sued. The court of appeals affirmed a grant of summary judgment in favor of WD-40.
 
The court found that WD-40’s use of “inhibitor” was descriptive fair use.  The district court reasoned that the word could not function as a source indicator because the Long-Term Corrosion Inhibitor bottle also displays the famous WD-40 shield, serving as the source indicator. The court of appeals disagreed, because products can contain more than one indicator of source.  Nor did WD-40’s omission of “the” matter, because, “[h]ad WD-40 called its product ‘Inhibitor’ and placed that word in large, bold letters on its can, we think it probable that a jury would find that to be trademark use, despite the lack of the word ‘the.’” Nor did the presence on the market of other products using the word “inhibitor” indicate lack of trademark use, because that just shows descriptiveness, and descriptive terms can be used as marks.  (One would think that widespread use would nonetheless offer some evidence of how to bet in any given case, not least because widespread use makes it harder for any given instance to acquire trademark meaning.)  Moreover, it didn’t matter that WD-40 used “inhibitor” on only one product, rather than every product in the line.  The converse wasn’t true: “Sorensen’s argument would be much stronger if ‘inhibitor’ appeared on all of the products in the Specialist line.” But a mark can be a mark for just one product in a larger line.
 
Nonetheless, the court of appeals agreed that WD-40 made non-trademark use of the term, because look at it (interjectionary complement because):
 
Compared to other features in the bottle’s design, the word “inhibitor” is much less prominent or noticeable. It is much smaller than the bright and eye-catching WD-40 shield. It is also smaller than the stylized and colored word “Specialist” and the colorful crosshair mark. Finally, the word “inhibitor”—which is written in relatively small, white type—is less attention-grabbing than even the word “Corrosion,” which is larger and colored in orange. Due to the word’s small size, plain color, and non-privileged placement on the bottle, we find that “inhibitor” is not an “attention-getting symbol,” and does not function as a source indicator.
 
Although WD-40’s communications guide required that employees and ads use the full name of the product, “WD-40 Specialist Long-Term Corrosion Inhibitor,” that didn’t mean that each individual word in the name served as a mark.
 
There was no doubt that “inhibitor” was descriptive of WD-40’s product, as the multiple competing uses showed. Further, WD-40 used the word multiple times on its bottle in a manner that was clearly non-source identifying.  Even if “inhibitor” required some imagination, the product was a “corrosion inhibitor,” which required no imagination to understand.  This wasn’t inconsistent with Fortune Dynamic, Inc. v. Victoria’s Secret, 618 F.3d 1025 , 1035 (9th Cir. 2010), which sent the question of whether the trademarked term DELICIOUS was being used in a descriptive sense to a jury.  There, “delicious” was used as a mark for women’s shoes (actually, that’s the plaintiff’s mark, not the defendant’s use, which was on shirts), and not for a food or beverage. If “Corrosion Inhibitor” appeared on a t-shirt, the court of appeals might’ve ruled differently.  (Though it shouldn’t have.  Suppose Sorenson distributes promotional goods such as T-shirts for his products, and so does WD-40.  The result in this case should be no different.)
 
Finally, no reasonable jury could find bad faith. There was evidence that WD-40 had knowledge of Sorenson’s product; even though there was no evidence that the marketing department, which decided on the name, had that knowledge, a jury could infer that someone with decision-making authority did know. But knowledge is insufficient to show bad faith—the plaintiff needed something more suggesting subjectivebad faith. Failing to conduct an investigation can sometimes support an inference of bad faith.  But if WD-40 believed that it wasn’t using the word “inhibitor” as a mark, it had no reason to conduct a trademark search. Plus, a theory of failure to investigate is inconsistent with Sorenson’s theory of guilty knowledge.
 
Turning to the crosshair: the analysis shouldn’t zoom in on the crosshairs alone, but on the labeling as a whole.  Consumers looking at the entirety of the labels wouldn’t be confused as to source. “The WD-40 bottles are primarily black and silver, with a large yellow WD-40 shield and a bright yellow cap. The packaging of Sorensen’s products, in contrast, is primarily orange, yellow-orange, and black.” Even the crosshairs were quite different: “WD-40’s silver and burnt orange crosshair, with silver symbols shaded to show depth, creates a different impression than Sorensen’s bright orange-and-black crosshair, which features two-dimensional symbols that are silhouettes.”  Their relative size and label placement were different—usually the crosshair appeared as the “O” in Sorenson’s “Inhibitor,” not as a free-standing mark near the bottom of the bottle, like on the Specialist products. “Simply put, the overall commercial impression of the two bottles is quite distinct.”
 
Further, the prominent display of WD-40’s own well-known marks was a strong indication of lack of likely confusion.  Sorenson first argued that this gave owners of strong marks carte blanche to infringe.  But trademark law “exists primarily to protect consumers, not only the holder of the trademark.”  And Sorenson could have brought a reverse confusion claim, but didn’t.  Sorenson argued that consumers would think the companies were co-branding, or that Sorenson had consented to the use.  But that theory makes more sense when the senior user’s mark is much stronger than the junior user’s, “lending credibility to the theory that the junior user was trying to feed off of the senior user’s goodwill.”
 
The use of an especially strong house mark can “greatly lessen the likelihood of confusion,” but “it may not wholly eliminate the possibility that consumers will believe a product to be cross-branded.”  (Ahem.  The standard, of course, is not possibility but likelihood.)  The strength of the senior user’s mark relative to the junior user’s mark affects that possibility; the weakness of Sorenson’s crosshair mark made it unlikely that consumers would think the well-known WD-40 brand was cross-branding with Sorenson.  The other key consideration is the comparison between the senior mark and the image on the junior user’s product.  “If cross-branding were indeed occurring, the junior user would likely use an exact copy of the senior user’s mark, and probably the name of the senior user’s product as well.” Not so here. “If cross-branding were occurring, the junior user would seek to make it as clear as possible; it would not use a significantly different form of a seldom-used logo.”
 
Similarity of the products: two of the products were functionally identical, favoring Sorenson, and the court of appeals found that “consumers might very well expect Sorensen, as the producer of rust-preventive products, to expand his product line into the types of sprays included in the Specialist line,” even sprays that don’t contain VCI. The fact that Sorensen’s current products all contain VCI was “minimally relevant,” since WD-40’s own product line showed that companies might make both VCI-containing and VCI-free products.
 
However, the area and manner of concurrent use/channels of commerce/targeted consumers didn’t help Sorenson much.  There was no evidence that the parties’ products had ever been sold side by side, targeted the same consumers, advertised through the same channels, or shown at the same trade show in the same year.  A jury could make limited inferences in Sorenson’s favor, since both parties’ products were sold in one store (albeit in different sections, and Sorenson’s VCI oils and sprays—the most similar products—weren’t sold at that store). “And, though there is no evidence that WD-40 specifically markets to Sorensen’s target audience—hunters and fishermen—that is somewhat beside the point, as WD-40 effectively targets all consumers.” A jury could also find that WD-40 specifically targets members of the military by selling to companies that supply military commissaries.  Still, this only weakly supported Sorenson.
 
As for degree of care, the parties’ products were “quite inexpensive (under $12), and could even be characterized as impulse purchases.”  Though WD-40 argued that its customers sought out its famous brand, that didn’t matter to the relevant consumers—those who sought to buy Sorenson’s products or would consider them, and who were misled into buying a Specialist product.
 
Strength of the mark: Sorenson didn’t offer consumer surveys or testimony about consumer awareness of the crosshair mark, or sales data “showing that products bearing the mark are so widely sold that a jury could infer that many consumers are aware of the mark.” Sorenson’s biggest problem was inconsistent use of the mark, which makes a symbol less helpful as a source indicator and therefore weaker.  The crosshair had been in use since 1997, but “inconsistently—sometimes the crosshair has symbols in each quadrant, sometimes the quadrants are empty, and many times there is no crosshair at all, but rather a bull’s eye.” This factor aided WD-40. 
 
There was no evidence of actual confusion, and no evidence of a bad faith intent to pass off WD-40’s product as having come from Sorenson, even though a jury could find that WD-40 knew of the crosshair. There was no evidence that the design firm that first designed the WD-40 crosshair had any knowledge of Sorensen’s mark, and the presence of the WD-40 shield on the products suggested a lack of bad faith.
 
The factors that favored Sorenson were not enough to create a material dispute of fact on the ultimate question of likely confusion.  The three most important factors—similarity of the marks, bad faith intent, and actual confusion—pointed “decisively” in favor of WD-40, especially dissimilarity of the marks. The “clear weakness” of Sorenson’s marks was also “central” to the court’s conclusion.
 
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Copyrighting appropriation art?

Posted on June 12, 2015 by rtushnet
The Jim Crow Museum of Racist Memorabilia has an interesting
discussion on the copyrightability of segregation signs. 
 
Q: Does anyone own copyrights to
Jim Crow Era segregation signage, such as the famous “Whites Only” or “Colored
Entrance” signs?
 
–Jerome Ward
Hartford, Connecticut
 
The answer begins correctly, then veers into wrong/deep
theoretical water.  It correctly invokes
the short phrases exclusion, then incorrectly invokes the useful article
doctrine in claiming that “the signs would have to have artistic merit beyond
their simple function to be copyrighted,” though the related doctrines of
merger and the idea/expression distinction serve similar functions for
informational artifacts.  Finally, there’s
this statement:
 
Segregation signs can be copyrighted
if they are used, or can be claimed as being used, as art or as artistic
statement beyond their original function. 
In the mid-to-late 1990s, African-American artist Marchel’le Renise
Barber created a line of reproduction Jim Crow Era segregation signs and sold
them in her store “Martha’s Crib”.  She
copyrighted them as the Martha’s Crib Jim Crow Sign Series:  “Barber conscientiously marks her own signs
as reproductions.  Although she
meticulously imitates the lettering, shapes, colors, and borders of the
originals, she stamps her versions ‘Historical Reproduction’ and sells them at
the bargain rate of ten dollars apiece. 
She also stamps them with the name of her store, the copyright symbol,
and current date.  Her signature replaces
that of the companies that commissioned and produced the originals… the date of
the ordinance on the originals is displaced by the date of the copyright… it is
not the original object or language, but the copy that is copyrighted,
reserving to Martha’s Crib the exclusive right to continue to make copies.  The copy, apparently, is an original, a form
of intellectual property, whose originality resides in its conception and
execution as a copy.”
 
So, original Jim Crow Era
segregation signs are not copyrighted in and of themselves, but reproductions
or originals used in an art piece or installation can be copyrighted so long as
they are used in an original construction or context beyond their original
function.
 
While the author cited the Copyright Office for the short
phrases/useful articles points, he cites Brian Norman, Representing
Segregation: Toward an Aesthetics of Living Jim Crow, and Other Forms of Racial
Division SUNY Press 2012 pp 29-30 for this last claim.  But putting a new signature on a public
domain or uncopyrightable work won’t make that work copyrightable.  Amy Adler’s work on the functions of
appropriation art makes clear that these are recognizable art objects and works
of expression, even if they defy interpretation; whatever they are, they aren’t
“the same” as the originals despite their near-identicality.  Still, a work can be a work of art without
being copyrightable.  But I’ll admit, I’ve
had students argue to the contrary, allowing Duchamp to be the author of his
famous Fountain.
 
Also, to the extent the signs are assembled into an
installation that counts as a fixation, the installation itself may well be a
copyrightable compilation.  That just
doesn’t confer any rights in the individual signs themselves.
 
H/T Zach Schrag.

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In which I sue the government

Posted on June 12, 2015 by rtushnet

So, remember when ICE held a press conference and claimed that disparaging a mark constituted counterfeiting?  I ended up filing a FOIA request to figure out under what circumstances ICE took this position, and since it was denied, I am now–with the wonderful assistance of Georgetown’s Institute for Public Representation–suing to have the requested documents released.  We don’t actually know very much about the government’s anti-counterfeiting operations, and I’m looking forward to finding out more and examining whether the government’s working definition of counterfeiting fits with what the statute really says.

(See, now I really do need a “my lawsuits” tag.)

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Copyrighting appropriation art?

Posted on June 12, 2015 by rtushnet
The Jim Crow Museum of Racist Memorabilia has an interesting discussion on the copyrightability of segregation signs. 
 
Q: Does anyone own copyrights to Jim Crow Era segregation signage, such as the famous “Whites Only” or “Colored Entrance” signs?
 
–Jerome Ward
Hartford, Connecticut
 
The answer begins correctly, then veers into wrong/deep theoretical water.  It correctly invokes the short phrases exclusion, then incorrectly invokes the useful article doctrine in claiming that “the signs would have to have artistic merit beyond their simple function to be copyrighted,” though the related doctrines of merger and the idea/expression distinction serve similar functions for informational artifacts.  Finally, there’s this statement:
 
Segregation signs can be copyrighted if they are used, or can be claimed as being used, as art or as artistic statement beyond their original function.  In the mid-to-late 1990s, African-American artist Marchel’le Renise Barber created a line of reproduction Jim Crow Era segregation signs and sold them in her store “Martha’s Crib”.  She copyrighted them as the Martha’s Crib Jim Crow Sign Series:  “Barber conscientiously marks her own signs as reproductions.  Although she meticulously imitates the lettering, shapes, colors, and borders of the originals, she stamps her versions ‘Historical Reproduction’ and sells them at the bargain rate of ten dollars apiece.  She also stamps them with the name of her store, the copyright symbol, and current date.  Her signature replaces that of the companies that commissioned and produced the originals… the date of the ordinance on the originals is displaced by the date of the copyright… it is not the original object or language, but the copy that is copyrighted, reserving to Martha’s Crib the exclusive right to continue to make copies.  The copy, apparently, is an original, a form of intellectual property, whose originality resides in its conception and execution as a copy.”
 
So, original Jim Crow Era segregation signs are not copyrighted in and of themselves, but reproductions or originals used in an art piece or installation can be copyrighted so long as they are used in an original construction or context beyond their original function.
 
While the author cited the Copyright Office for the short phrases/useful articles points, he cites Brian Norman, Representing Segregation: Toward an Aesthetics of Living Jim Crow, and Other Forms of Racial Division SUNY Press 2012 pp 29-30 for this last claim.  But putting a new signature on a public domain or uncopyrightable work won’t make that work copyrightable.  Amy Adler’s work on the functions of appropriation art makes clear that these are recognizable art objects and works of expression, even if they defy interpretation; whatever they are, they aren’t “the same” as the originals despite their near-identicality.  Still, a work can be a work of art without being copyrightable.  But I’ll admit, I’ve had students argue to the contrary, allowing Duchamp to be the author of his famous Fountain.
 
Also, to the extent the signs are assembled into an installation that counts as a fixation, the installation itself may well be a copyrightable compilation.  That just doesn’t confer any rights in the individual signs themselves.
 
H/T Zach Schrag.
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In which I sue the government

Posted on June 12, 2015 by rtushnet

So, remember when ICE held a press conference and claimed that disparaging a mark constituted counterfeiting?  I ended up filing a FOIA request to figure out under what circumstances ICE took this position, and since it was denied, I am now–with the wonderful assistance of Georgetown’s Institute for Public Representation–suing to have the requested documents released.  We don’t actually know very much about the government’s anti-counterfeiting operations, and I’m looking forward to finding out more and examining whether the government’s working definition of counterfeiting fits with what the statute really says.

(See, now I really do need a “my lawsuits” tag.)

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