IPSC Breakout 4 IP and Property/Contract Theory

Posted on August 9, 2024 by rtushnet

Shyam Balganesh, The Eunomics of Intellectual Property

Lon Fuller’s institutional design theory: understand
institutional design as a way of understanding institutions on the
understanding that they’re not infinitely mutable. One shouldn’t begin with an
unilateral approach on their ends. Ordinary assumption: institution is trying
to maximize some goal, so tweak construction based on that goal. Fuller says this
is problematic. We need to understand institutions as means-based. The means
are not fully contingent, but themselves add important values and are not
infinitely mutable. Eunomics is that project.

Don’t understand contracting, mediation, adjudication as
ways to maximize other variables solely. They emerge from ways humans desire to
interact with each other in society—conventional morality. That interjects not
just path dependence but some kind of immutability b/c the normative goals of
that kind of ordering interact are sticky. People desire that contract be in
some part about human relations. Means/forms themselves contribute important
normative goals.

Second: inner morality. Often described as having to do with
morality & general jurisprudence, but Fuller had a simpler understanding:
forms of ordering have their own internal integrity. There are elements in a
form which remain immutable such that if you take it away, it ceases to be that
form. Take away the impartial judge + adversarial system = not a judicial
system. Take away reasoning = ceases to be adjudication. A commitment to
integrity in form.

Third: The forms of ordering in society around resources and
interactions are necessarily limited, not infinite. Limited set allows humans
to channel and recognize how they want to order their lives. The mechanism of
adding to the set is slow and evolutionary. There is a strong resonance to
numerus clausus.

We can apply this to IP. There are three or four major
common forms of ordering IP around which different regimes come to be
structure. Newer kinds of resources may hybridize, but they’re defaults.
Copyright, patent, trademark.

(1)  
Appropriation form. Focuses on nature of wrong,
interpersonal relationship of appropriation that doesn’t begin w/identification
of resource but w/interaction deemed to be a wrong. That generates right/duty
obligation. © is paradigmatic, but expanded to ROP where an intermediary doesn’t
have to define a right in advance.

(2)  
Grant-based: patents, property, prospects. The
resource mediates the interpersonal relation. An impartial third party is
supposed to delineate the resource.

(3)  
Use perfection form: focus on behavior of entity
that can develop over time a right that is perfected through registration or
recordation—trademark.

The list is closed, but not closed at all times. It evolves
and hybridization is possible. The forms themselves, the defaults, are conventionally
determined b/c they come with their own underlying normativity. The means of
institutional forms are not necessarily contingent and bring their own values.

Zachary L. Catanzaro, Algorithmic Deadhands: What is Dead
May Never Die

Idea of AI trustees that enforce rules after individual’s
death. These aren’t conscious systems. Try to get “bounded optimality,” not
exactly replicate testator’s intent. Cognitive processes can be extended after
death through technological artifacts. We could train a system to monitor for
death records and make corresponding dispensations. We could try for active
monitoring of beneficiary behavior: A to B so long as B never smokes. That requires
more surveillance (Zuboff’s Surveillance Capitalism). What about “as long as B
lives a healthy lifestyle”? We could train AI to predict probable intent by
looking at data about O’s behaviors. We could exercise more control, in ways
that are often bad—genetic or political profiling. Coercion of behavior.
In property law today we teach there’s a balance b/t free alienability of
property and honoring testator’s last wishes; there’s conflict in the case law,
but there’s a pendulum between formalism and not.

Allowing AI systems to predict and control the present
creates new digital mortmains; emerging risk of reinforcing this type of
property control. Convoluted way of circumventing abolition of fee
tail/restraints on alienation/longstanding rules of property law that prohibit
conditions on who a person can marry, what religion they can be, etc. Too much
control. Risk of model collapse as systems self-iterate.

Possible solutions: reinforced privacy protection, anti data
scraping laws, temporal limits on behavioral data use, etc. Further research:
deeper into law of perpetuities/trust law. Philosophy of mind and causality for
automated systems. Transhumanist applications. Any hard rule programmed in
systems to limit them will necessarily be formalistic in nature.

James Grimmelmann: what would the legal system do in
response to one of these dead hand systems? The traditional legal rule would be
to void an unenforceable condition. Is that sufficient for a system like this?

A: We do need another form of intervention. The problem w/
relying solely on property law is that most states have weakened dead hand
control to the point of meaninglessness—a Fla trust can last 1000 years.

Jennifer Rothman:

[Along with all these other problems, I just think about “my
abortion is different”—O’s behaviors and O’s beliefs about what others
should do may well differ.]

TJ Chiang, IP Ownership and Penalty Default Rules

Patent v. copyright ownership defaults: employer ownership
of employee creations is WFH in © but patent, employee owns absent assignment.
Every contributor to conception is automatically a joint inventor; © makes
primary author sole author absent agreement. Patent = no duty to account, every
coowner is an owner who can practice without accounting; © is different and
every coowner must account to others (absent agreement).

Penalty default concept can explain the differences. Patent
prosecution is expensive and legally complex, so patents tend to involve at
least one legally sophisticated party and higher stakes, making it suitable for
penalty default rules. © is automatic on fixation and easy, not suitable for
penalty defaults. Criticism of “penalty default”: these aren’t penalties, just
majoritarian defaults and conditions for contract formation. Rules that force
parties to reveal info to courts are very different from rules that force one
party to reveal information to the other; they function quite differently.

His theory: penalty defaults incentivize disclosure of info
to courts. Info asymmetry between parties is not his focus. To be efficient, a
penalty default requires: a party being penalized to be legally sophisticated
enough to know about the rule. Benefit to courts in saved costs must outweigh
transaction costs in contracting around the rule; social loss of bad outcome if/when
parties fail, and cost to devise and apply the penalty default rule. There must
be enough privately at stake to give sufficient incentive to contract around
the penalty default. Should create a high private loss but low social loss if
bad outcome eventuates.

Jeanne Fromer, First Ideas

First is polysemic. Interweaving of earliest in time and
best. We mix these up; it’s important to understand the normativity of choosing
“first,” and think through what we’re trying to accomplish with different forms
of IP to allocate rights.

General rule in real property is first possession. Pierson v.
Post as most famous American case (or McCulloch!). Pursuit isn’t enough;
possession is the key. In patent that is reduction to practice, which can be
actual or constructive. This creates pressure to file early, especially given
statutory time bars after disclosure.

When we think about patent: you have to have actually
created every embodiment you claim w/in the scope of invention—not necessarily
physically but constructively. If you say “I invented all light bulbs with filament
starting with letter T” you have to have constructively enabled tomatoes, thistles,
etc. First is fictional in many ways, and this is a theme. You might have done
some subset but not a full scope and we’ll deem you to have done that.

Things are also carved out of first—law of nature, abstract
idea, natural phenomenon.

Some rules are about not claiming first too quickly: utility
rules—there has to be a specific benefit for the invention. Novelty/nonobviousness;
getting beyond prior art—if not, no one is first. Continuations and doctrine of
equivalents also affect firstness. And people who are prior to first—prior use—are
carved out as well.

Copyright is more generous in allocating firstness b/c
standard is so low. In some ways © rejects firstness because it doesn’t matter
if others are doing the same thing.

TM: use and registration differ in source of firstness;
legal fictions like national use also extend firstness. Lack of rights in gross
mean that firstness is cabined in other ways.

Real property critiques of firstness—appropriation/expropriation
of prior peoples—can also influence IP. Expressive incentives matter as well:
firstness as incentive? What about first losers? We don’t have violence in the same
way as in real property but we do have power dynamics, like first to file being
easier for big entities.

Grimmelmann: there are a lot of similar ambiguities in real
property—disputes over the scope of what people have acquired title to. Biggest
modern survival is adverse possession; always a question about whether you
possessed the whole or only part of the parcel. More continuity than contrast. (I
also think about the work of people like Claire Priest and Gregory Ablatsky’s The
Rise of Federal Title, which emphasize that constructive
possession/allocation from regional capitals was actually a huge driver of US
ownership in contradiction both to native title and to small colonizers.)

Mark McKenna: key to emphasize that first is not found in
nature. Many disputes: Not trying to decide who’s first; which of two people
beat the other to it. Should that make a difference? (Relativity of title!)
Also, consider reverse confusion, which isn’t really a confusion doctrine but a
priority doctrine. Sometimes we have to pretend there’s confusion to honor the
first use or it will be wiped out.

A: We’re often allocating rights and making claims w/o
having to think about other parties in dispute. Maybe we shouldn’t as much—wait
more until there’s an actual dispute. Reverse confusion was one of the things
that got her into this project.

Matthew Murrell, Cyborgs and the Law of the Human Body

Dick Cheney had the wifi for his pacemaker disabled because
of fear of cyberattacks; implants have been with us for a while, especially
cochlear—eye implants are on the way. 3 million Americans have implants now; this
will grow exponentially due to brain/computer interfaces.

Common law: wooden leg is property not person, and no
compensation can be awarded for injury. Some states have updated worker’s comp
but still treat the artificial body parts as property, not part of the body.

Neuroscience: artificial parts of body are unquestionably
part of the body: our brains map our bodies and are constantly updating that map.
Phantom limb syndrome: body schema includes lost arm. If a prosthetic is used,
the brain adapts—tooth fillings, artificial hips, artificial limbs. Interesting
things at edges—in virtual spaces, people can map onto 3 foot long arms, but
not lobster claws—but the brain is adaptable. Our body is our body schema in
the brain. It is wrong to treat them as personal property only.

One path forward: default rule is that cyborg bodies should
be treated the same as corporeal bodies. Privileged lived experience of
individuals with atypical bodies and individuals with modified bodies.
Individuals with modified bodies are going to use cyborg bodies to express
themselves—an important site of political expression. Cyborgness will be
immaterial in the normal run of cases—worker’s comp, tort.

Exceptions: capability of a particular body part. Human
ability=normal vision. Superhuman ability=hawk vision 20/2. This may be
material for, e.g., intrusion on seclusion. Extra-human capability=ability to
see infrared light; police officer with this would still have to follow Kelo.

Corporeality: the further a cyborg body drifts from the human
form, the more it might warrant departure from the default rule—people may be
able to operate spaceships.

Severability: wearables are getting more sophisticated; we
may need to distinguish wearables from body parts.

Andrew Gilden: Haraway’s Cyborg Manifesto is the first thing
he thinks of—we’re all sort of cyborgs. Worry a little bit about overly
focusing on neuroscience and the nervous system as defining what’s a legitimate
body. How does this apply in the context of gender-affirming surgery? Advanced
wheelchairs?

A: The full paper addresses some of this—social theory and
empirical work on virtual spaces—when white subjects are given Black avatars,
their scores on implicit bias tests go down for a while. Struggled with how to
constrain the definition of cyborg, but trying to clamp down on problems—more expansive
you get with the word cyborg, the more it includes wearables. Optional
additions will be a part of this explosion.

RT: Peggy Radin’s concept of property—why shouldn’t
removable property be part of our personhood? Maybe different treatments in
tort and accessibility law are appropriate? How much does it matter if our
minds map onto the body part? High heels can be really important to a person,
but not worn all the time.

A: countervailing: in tort, the idea of the body is hugely
important and expensive—you may be committing battery if you strike a horse and
its owner is riding it.

Q: also consider product liability regimes. Strict liability/design
defect.

Jeremy Sheff, A Heap of IP: Vagueness in the Delineation of
Intellectual Property Rights

Vagueness and notice: a pervasive concern in IP. Vaguely
delineated IP rights are worrisome b/c public won’t know what it can do. Patent:
specifics vital and a goal of the system is to provide specificity. Copyright=exemplar
of work is the work makes the claim inherently vague; TM—vagueness attends both
registered and unregistered marks, especially trade dress.

Can philosophical literature on vagueness help?

Sources of vagueness: at least two dimensions. First:
qualitative. IP rights are not really in things, they more resemble rules. The
property in IP is inevitably a category of possible things.

Second: composite nature of IP rights. IP rights/claims have
elements: limitations of patent claim; features, particularly protectable
features, of © work, and components of a trade dress. Although they might not
be explicit in a claim, in an infringement case the first thing we do is ID the
elements and look for them in the accused embodiment.

Qualitative vagueness turns on imprecision of natural
language: “no vehicles in the park” doesn’t necessarily tell us what’s inside
and outside the rule. More broadly, the idea going to philosophy of language
that we have cause to be skeptical that any rule can define in advance its
application to all situations. Even with nonlinguistic claims like © and TM,
those types of claims often get translated into linguistic terms for purposes
of analysis b/c that’s what legal systems do.

Composite nature: there’s another dimension of vagueness,
the problem of the heap. The sorites paradox/the Ship of Theseus. How many
elements can be removed/replaced before it is no longer the same thing? With
patents, all elements are required—unless the doctrine of equivalents applies!
Figuring out how many elements we can take away before we’re not dealing with
the same thing is a central challenge. How many hairs can be taken away before
a person is bald? People disagree, and the predicate operates on a continuum
rather than hair/no hair.

Vagueness can be multidimensional—qualitative and
quantitative vagueness can occur at the same time and any given element can
also be vague, for infinite regress. Best Cellars TM case: what is the trade
dress and how many things don’t have to be there before it’s not infringing? If
the circles for the wine were hexagons instead, would it be infringing? What if
the wood was dark instead of blonde?

Philosophical approaches may not be available to legal
systems. One response: epistemicism: there is a sharp boundary, but it is unknowable.
Or we could reject bivalence: there is a range of cases for which the predicate
is neither true nor false—or both true and false. Legal systems can’t do that—we
need an answer, infringement or not.

Responses to qualitative vagueness, one approach is
precisification: change the natural language meaning of the term to a
quantifiable technical meaning. But multiple precisifications of a vague predicate
may be plausible; which should we choose? One approach is asocial: we
categorize the range of precisifications and try to determine truth values in
certain situations. Narrows the zone of borderline cases but does not eliminate
them.

Social approaches: associated with crude Wittgensteinian
reading: meaning of vague term is only determined by community’s use. That’s
what IP does: allocates authority to community to figure out whether this embodiment
does or does not infringe a right.

Interesting things about IP’s solution: (1) community
differs across the range of IP. Patent: PHOSITA. Copyright: public. TM:
ordinary consumer. (2) Even though the law creates privileged communities,
decisionmakers who resolve vague rights claims often come from outside the
privileged interpretive community (except in ©). Choices are not about
eliminating vagueness but about defining who gets to do it. That tells us a lot
about who the system is for.

McKenna: how does the overall scope question get allocated?
When a court decides something is a valid trade dress, the court is deciding
what the elements are, including thinking about functional elements, then
throwing the rest of the decision to the jury. Even in ©, idea/expression or
merger has also done definitional work.

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IPSC Breakout 3: Trademark and Unfair Competition

Posted on August 9, 2024 by rtushnet

Mary Catherine Amerine, Reasonably Careless Consumers in
False Advertising and Trademark

Consumers can devote much more (or less) time to a decision
than seems rational for the amount of risk/benefit in their lives. Court expects
consumers to be reasonably prudent in both TM and false advertising. But courts
apply this test very differently and in contradictory ways for inexpensive
consumables. In TM, assumption is that consumers will be more careful with
expensive goods and less careful, to downright careless, for cheap grocery
items. This goes back to the 1930s. Consumers can’t be expected to examine
labels carefully—they find confusion for marks that might not be very close,
like BREW NUTS/BEER NUTS, POWERBAR/POWERSTICK energy bars, BULLS’ EYE/RAGINB
BULL for BBQ sauce, HUGGIES/DOUGIES. Ann Bartow points out this also reflects
assumptions about female shoppers, who do 80% of shopping. Class component as
well. More importantly, the assumption may just be wrong. 2019 survey on “low
involvement” and “high involvement” buyers; 53% of grocery shoppers were high
involvement; under age 45 more likely to be high involvement; gender had weak
association with high involvement, but yearly income = more likely high involvement.
So courts might be wrong about half the time.

One question: how does this bear on store brands that mimic
national brands.

Compare: false advertising in product packaging, where
courts have very different expectations for the reasonable consumer, both
Lanham Act and state law unfair competition cases, of which there are far more.
Manuka honey case: court said that reasonable consumers would know rather a lot
about Manuka honey. That’s a much higher standard than required in TM. Is this
disparity justified? She doubts it, even based on history and tradition. Low
cost should not equal low care across the board.

Mark McKenna: Is there any relationship between cost and
care or differences in how that manifests in categories? That is, how should
courts operationalize this? Deep tension b/t empiricism and normativity in both
these areas. Is doctrine really trying to approximate empirical reality or making
decisions about the kinds of consumers we’re willing to protect? [which would
be an additional reason TM would be broader b/c we aren’t distinguishing among types
of producers we’re willing to protect in the same way.]

A: sees false advertising cases as normative.

RT: Lowest common denominator reasoning: one response is that
TM says that if consumers are heterogenous we protect the least sophisticated
group regardless of whether there are costs to the nonconfused group. Consumer
protection law doesn’t do that. If we said that out loud within our discussions
of reasonability maybe there’d be less of a conflict.

Relatedly: probabilistic reasoning: a private plaintiff can
win if a substantial number are likely to be deceived, which can be as low as
15%; in a class action, courts think it has to be presumed that 100% are
deceived, and they don’t seem happy with numbers that low although they might
be willing to go with 40% or 50%

Hughes: Surveys aren’t scrutinized for whether they selected
reasonable consumers—which affects the “empirical” claim. [I love this point.]

TM law may also be contextless b/c they’re about
registration. [That seems unlikely to me, given the number of TM infringement
cases litigated about reasonable consumers.]

Courtney Cox, This is a Talk About Deception

Manipulation is a broader concept than deception. Existing
laws and doctrines targeting fraud may also extend to manipulation that’s not
deceptive. Courts might have more power than we think without additional laws.
If we think of consumer protection law as being in part about manipulation, not
deception—Joe Camel, where children are being manipulated—maybe those are not
sui generis but part of a broader prohibition. There are other ways to muck
with adults’ decisional processes. Methodological point: be careful about
theoretical concepts because of anchoring bias (also a leading tool of
fraudsters) which can lead us astray.

Evidence against this thesis: the name of the ancient tort,
deceit. The name of the modern tort, fraudulent misrepresentation. Restatement
Second of Torts also says misrepresentation. But we should get to ask whether
deceit is about “misrepresentation” or about “deception” (the result).

Deception: A causes B to have a false belief (maybe
intentionally). But a better definition includes A intending for B to conclude
(or to communicate/imply) that P, acts so as to cause B to conclude that P,
where P is false, and where A has the relevant beliefs. Mostly, at the very
least, A can’t believe that P is true. If A doesn’t believe P is true, that may
be misleading but it’s not deceptive.

Who cares? Start w/leading example of law of deception, the
tort of deceit, the leading lies-based cause of action: fraudulently make misrepresentation
for purpose of inducing another to act in reliance: subject to liability for pecuniary
loss caused by justifiable reliance.

The centrality of reliance to this tort according to
Goldberg & Zipursky matters: reliance is not about harmful lies; even if a
misrepresentation harms a victim, there’s no deceit claim unless the victim
relies on it. If a third party pays for a purchase by a second party that she’d
already agreed to pay for (“whichever you pick”), and the misrepresentation
affected what the second party chose and negotiated for, the third party can’t
recover for deceit because she didn’t rely on the misrepresentation. The
deception didn’t play into her decisionmaking process. Thus, it would seem that
deceit is not about deception. But then what is it about? Her suggestion:
manipulation. Covert or hidden influence—surreptitious mucking with the
reasoning process. It’s common to confuse manipulation and deception—trick,
dupe, cheat, cunning.

Once you see that deceit is about manipulation and not
deception, you can choose two deceits: manipulating another to detriment or
manipulating another to detriment by means of deception.

But, surprise! Restatement allows claims for deceit even if
fraudster believes P is true.

RT: Perhaps if these distinctions are too difficult for
philosophers they are definitely too difficult for courts and we should start
looking for harm causation + falsity anywhere in the chain.

However: Joe Camel seems different from causing someone
to have a false belief. “Neither true nor false”—bullshit/puffery. Saying that
you “believe” Joe Camel doesn’t make much sense.

A: if we think about deceit as being about deception, you’d
need a proposition, but if it’s about manipulation, there’s a potential for
manipulation in ways other than a false proposition, including a surreptitious
mucking with the decision process. Puffery can be false, but grownups are
expected to know that “best” is not reliable.

McKenna: simple version of manipulation seems fundamentally
incapable of being a rule that a court could apply; distinguishing between
manipulation and persuasion is an impossible task (as is often whether they
have been “harmed” by being persuaded). That suggests the narrow version—manipulating
by deception—is the only way to make the legal standard manageable. [I
will note that an interventionist state could decide to rely on what you
were persuaded to do as a distinguishing fact, though that has a bad
history.]

A: relevance to dark patterns/behavioral manipulation that we
aren’t aware of and affect our decisions but don’t involve propositions.
Philosophers might be able to learn from consumer protection law about how to
break down the concept of manipulation [and distinguish it from persuasion?]

Barbara Lauriat, Two Nations Separated by a Common Trademark
Law

In UK, goodwill is a different thing from TM protected by
the tort of passing off. TM rights depend on registration, though not unaffected
by use; registered TMs are property rights. UK is not “unfair competition”
regime as such: protects the property right in goodwill through tort.

US: TM is use-based and protected through common law
enhanced by statute; US courts identified goodwill as the property right
protected by common law TM doctrines; blurred distinction between registered
and unregistered marks—all protected by the same doctrine.

Christopher Wadlow identified three doctrinal strains by the
1870s: common law passing off, which required fraud and allowed only damages as
a remedy. Passing off in equity, which could result in injunction without
proving scienter. Statutory doctrine of property in TM, by which infringement
was wrong whether there was knowledge or intent. TM law is messy and these
blend; in the UK, those three strands resolved in early 20th century
into two strands: registered TM rights and tort of passing off which protects
goodwill. In US they turned into one amorphous blob. 1903: Paul’s Law of TMs
says in England “TM has become practically synonymous with registered TM.” 1878
treatise: recent authorities mean that TM is property insofar as an imitation
will be infringement restrained by law even when there has been no fraud. What
about things that couldn’t be registered? Was it supposed to take over from
common law? Wasn’t clear. TMs became increasingly formalities-based: in 1905
Act, registration was source of title to exclusive right as opposed to evidence
of common law right; use was not required for registration. But passing off
required property to protect that wasn’t a TM. By 1915, they used “property in
the business or goodwill likely to be injured by the misrepresentation.”

In the US, goodwill was the object of TM/unfair competition protection;
goodwill is use-based.

Areas that highlight the challenges of combining formalities
based statutory protection with use based common law protection in both jurisdictions:
secondary meaning/acquired distinctiveness; incontestability; prior rights;
assignment in gross; bad faith; dilution; relationship with privacy/personality.

McKenna: Periodization here is tricky b/c registration comes
to UK earlier. Thinks by early 20th century, distinction between
technical TMs and unfair competition was pretty solid, though it then
collapses. Trade names: now thought to be the category of things that need
secondary meaning, but they used to be something different. Lanham Act drafters
understood themselves as covering technical TMs and leaving unfair competition
alone; courts just made up protection for unregistered marks, mostly because of
Erie. There was a distinction in American law, but it got wiped out.

A: broadly agree to a great extent—not as linear as it was
in the UK. US swerves at two and then gets one.

RT: [unjust enrichment: not required to show harm. Starting to
create Article III problems in the US. What about the UK and lack of harm
requirement?

A: there are some cases that definitely verge on harm-free.
Depends on the judge. Unfair advantage—incorporated EU rules—is that unjust
enrichment? Does unjust enrichment start to come naturally when you’re
protecting goodwill? If there’s statutory provision, you just protect against what
the statute says (though you may have to figure out what counts as “unfair
advantage” from the statute).

Vidal v. Elster: Thomas claims that English law protected
against use of name as fraud; no, that’s the opposite of the truth, 1848 Clark
v. Freeman, where P was an eminent physician but not a competitor in the market
for consumption pills; he lost because he had no claim (neither libel nor TM).
English law protected against use of TMs/passing off by competitors,
which could include names under appropriate circumstances.

Matthew Sipe, Trademasks

Ghost kitchens where you think you’re buying from a local
but you’re getting Chili’s wings, which you might already know you hate.
Rebranding after disasters, e.g. AirTran to Southwest. Makes it harder for
consumers to exercise their preferences. New TMs hide from consumers. Companies
also do the opposite: proliferate brands; buy small businesses and keep their
names so the beer you think is local is made by ABInBev. Every beer band you’ve
ever heard of is owned by two sellers. Conceals outsourcing; changes in labor
practices; changes in product quality.

TM law tolerates this; it’s not misuse or abandonment. This is
a problem for our ordinary conception of TM law as protecting consumers against
deception, reducing consumer search costs; protecting producer investments, incentivizing
producers to maintain their reputations. Masking creates deception and
confusion, increases search costs, and reduces the incentive to maintain your
reputation because you can bail at any moment. Even in the heartland—passing off—we
are totally fine with deception and confusion aided and abetted by TMs.

Instead, the only justification for TM law is protecting
producers; benefits to consumers are purely ancillary. TM owners allow
producers to control search costs for consumers—raising and lowering are
both permissible.

Makes TM law as competition story less plausible—not efficiency,
not consumer welfare, so it’s competition law with a producer welfare standard.

Makes TM as property way more plausible: centered on
preventing interference and free riding rather than public benefit; quasi-moralistic;
right to destroy; lack of strong duties for owners; tolerant of inefficiencies.

Proposal: Supplementing trademarks with consumer protection—to
make TMs more acceptable, control TM as vehicles of deception that are
deceptive because of secondary meaning. Maybe InBev needs to put its logo on
the beer brands it acquires, at least for a while. Maybe new formulas need to
be clearly advertised.

Fromer: who would have standing? Competitors might be the
appropriate targets in this story.

McKenna: this isn’t just about when there’s some change in
the mark. Inherent in the fact that the modern source rule doesn’t mean
anything like what “source” means—includes marks adopted in the first instance.
The way they’re used obscures everything about the production process.

Theoretical claims about TM are grossly overbroad: TM has
never been about search costs—only a very tiny range of search costs; there are
millions of other sources of search costs about which TM has nothing to say. If
you really cared about search costs writ large, you’d do cost benefit analysis.
You’re talking about circumstances where the balance changes. But that just
means the scope of TM’s concern for search costs is narrow; the assumption is
that the market polices other aspects of search costs—if they change their
product and it sucks, the best thing they can do is keep their TM because it
allows us to punish them for that.

A: some are self-correcting and others aren’t.  A consumer might never discover that their favorite
microbrewery was purchased by InBev.

Hughes: you’re against versioning? GM makes Cheerios and
Trader Joe’s makes Honey O’s in the same facility. Is that also a problem
because TJ’s sells what are in effect Cheerios? Thinks the deterioration
problem is self-correcting. Ben & Jerry’s says Unilever on the back so it’s
not deceptive.

Rosenblatt: We think of TM as being about deception, but
maybe they should be about manipulation! Also, maybe this is not an acceptable
regulation of interstate commerce any more!

RT: Take a look at treatment of omissions under consumer
protection law/scienter requirements are relevant. Scienter and materiality are
often partners: if it’s material and unexpected, we can often infer that you
intended people to rely on the omission. When you have to read the back of a
package as a reasonable consumer is a question presently setting district and
circuit courts on fire!

A: expects that the lowest likelihood of reading the back of
the box is when you’ve bought it before and already have defined expectations.

from Blogger http://tushnet.blogspot.com/2024/08/ipsc-breakout-3-trademark-and-unfair.html

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IPSC session 2 copyright/trademark

Posted on August 8, 2024 by rtushnet

Copyrightable Subject Matter

Kevin Collins, Copyright in Suburbia (Collins is a
registered architect as well as a law prof)

The stakes: whether © is “working” in suburbia matters in
ways that might not be self-evident.

Snack box approach: scattered observations about costs and
benefits; a bit of a wash.

Design of built environment is a tale of two industries.
Custom design: almost all nonresidential buildings; some upper end residential
buildings; employs most architects. Site conditions, budget, programmatic needs
are subject of custom design; a few top-end family homes. Stock design: mostly
residential, and single-family homes in particular. Customers take design as
off-the-shelf, commodity product; architects are scarce. Architects may be
dismissive of these as architectural design at all.

Custom design: © is largely irrelevant. Custom design is
where you’d expect innovation and creativity to be living. But that turns out
not to really be true b/c it’s hard to attribute to © any role at all in the
custom architectural world. Architects don’t use their IP to tamp down on
copying by competitors—as determined by datasets of complaints and trade press.
What architects do is they sue their clients who have them do preliminary
designs and don’t pay, and they sue departing employees. Why? There isn’t close
copying for reasons independent of ©; norm of creativity on supply side among
professionals; demand side—client demands for program, site, budget mean close
copies have little value to clients. They don’t want something tailored to
needs, tastes, and budgets of someone else. [Seems like Amy Adler’s work on “art
world” where © is also not relevant.] Implication: weak incentive to create justification
for ©.

Stock design: Similar houses do exist; © owners, usually not
architects, do use their copyrights against competitors. Copyright has the most
impact on the least creative sector.

Observations: Little evidence of copyright induced
creativity from AWCPA. Originality is minor and incremental at best in the
suburbs. Little evidence of change since 1990. Incremental creativity of the
type one might expect even in a competitive industry w/o ©? Functionality of
layouts helps to explain similarity of floor plans, but not similarities of
elevations, massing, or style.  

High marginal cost of production may also make © less
relevant. Suburban architecture doesn’t respond to © incentives; efficiencies
of scale and production, especially w/in large builders. Demand side:
conservatism due to focus on investment and resale market. Want houses “broadly
attractive to all comers.” [NFTs as contrast? Resale value was a big concern,
maybe creativity not so much.] House as symbol of domesticity and arrival in
middle class: people buy “sanitized versions” of the “riskless familiar” that
seem predictable and safe. Consumers may simply not care about design. Size and
location are all important; money spent on design is wasted.

Troll problem: Highlighted in 7th Circuit Design
Basics cases. That was a problem at one point but doesn’t seem to be so today—a
significant cost, but now mostly in past. Design Basics: stock plan licensor
filed over 120 infringement lawsuits against developers/builders; evidence
suggested that © enforcement was more profitable for them than licensing and
building plans. Trilogy of cases: each one got more severe on Design Basics
than the last—2017: no access, no substantial similarity/© is very narrow; 2021
redlined version in D’s files and still no substantial similarity; 2023 fee
award. Of complaints alleging infringement of stock single-family home designs,
a downward trend to about 10/year. But housing completion has still been on the
rise. Perhaps potential Ds are behaving differently, but Ps may also be. Most
of the repeat players aren’t active any more; most of the remaining involve
homebuyer intermediaries and single infringing houses. Some lapsed-licensee
cases.

Homebuilding industry structure: Not a very concentrated
industry; mom & pop builders are important players. Merchant builders are
large scale, vertically integrated from land acquisition to sale of house;
proprietary portfolio of designs. Mom & pop: build single houses, do
license plans; there’s a role for © there for well-documented plans at the
upper end of the market for stock houses and lower end of market for custom
houses.

Yvette Liebesman: Renovation industry/additions? Landscape
architects?

A: has restricted to types of design protected by AWCPA, and
landscape is outside that, so he hasn’t looked/little © protection for things that
aren’t buildings. He does count renovations within the custom design world b/c
people who want renovations have particular needs, so the same rules apply—©
doesn’t play a real role.

Charles Duan, What is Copyrightable in Software?

Trilemma: (1) methods of operation aren’t eligible for ©;
(2) Congress requires software to be copyright-eligible; (3) software is purely
a method of operating a computer. Courts have tried to bend one or more of (1)
and (2) to make this work. His claim: (3) is the error. There are expressive,
nonfunctional elements of software code, which is what © should protect.

Functionality: an element is functional if changing it would
result in performing different instructions, or in a different order; storing
substantively different information in memory; generating different outputs
given the same inputs. That’s a high bar for functionality. If there are parts
of code like that, then the Fed Cir is wrong (that you have to protect
functionality if software is to be protected).

Spacing code affects how humans look at it, not actual
program operation; that could be expressive. Equivalent grammatical forms = work
same in computer, read very differently to humans. Seems expressive.

Bound variables: names of variables in functions—doesn’t
care whether a function is called r or radius. That name can’t be used anywhere
else or accessed by any other part of the program so its purpose there is
solely to define the function for the reader. Order of declarations is also
optional.

You can structure code in ways that are more or less readable;
straight through or start with summary; ways that convey brilliance or not.
These make programs expressive and don’t have any affect on functionality.

Applications: Literal copying of source code is still infringing.
Nonliteral copying in GvO, though, is unlikely to infringe unless there are
particular elements—the elements to which O pointed were all still functional;
if you changed them you would have gotten different outputs. But ordering of declarations
could have made a difference—but it’s not clear those were copied and they
probably weren’t.

Generative AI code infringement case: Litigation said “other
than spacing, these are identical and that’s evidence of infringement.” But
spacing is what’s expressive! The compact but disorganized example is the
human-written one; means that Copilot recognized the parts that were
nonfunctional/expressive and integrated them into the software—it seemed to
distinguish b/t functional and nonfunctional material, an interesting and
surprising result.

Christian Helmers (co-authors Carsten Fink, Julian Kolev,
Andrew Toole), On your marks! Trademark races and their impact on product
introductions

Some TMs are more competitively effective than others.
Supply of competitively effective TMs is limited: increasing TM depletion. What
is the impact on businesses and consumers?

Aim: identify TM races where demand exceeds supply; estimate
causal impact on product market outcomes; simple counterfactuals allow trading of
priority. Ask about negative effects of not getting first-choice TM, potential
gains from trading TMs; whether trading should be allowed.

Data: look at suspended applications, which can occur with a
potentially confusing TM application w/an effective filing date that predates
the application. Suspension removed when first filed application is abandoned
or registered. Dataset was ITUs only. Being able to introduce first choice mark
makes launching product much more likely.

Priority would be predicted to be transferred in 53% of
races; transfers would boost estimated registration rate from 37% to 41%. Losing
a suspension race leads to 1.5 years longer examination pendency; 50% lower
registration rates; 20-40% slower product introductions; 30% drop in continued
use rate for second-choice marks.

Lunney: you could already pay a first to file person to drop
their ITU; once you’re in a race, if you’ve filed the second ITU and they drop
the first, you get priority over the rest of the world. So why aren’t these
deals already happening?

A: frictions may exist.

Dustin Marlan, Disclosing the Trademark Bargain

Registration offers information: domicile/citizenship; date
of first use; first use in commerce; goods; and drawing. The TM regime hasn’t
been powered by the Progress clause, but there’s still a commerce related bargain:
protect public and protect TM owner. Disclosure: gives registration-based
incentives to disclose; the price is the disclosure allowing the public greater
transparency and perhaps surveillance for the mark owner. Reveals branding
strategies (but can be fought with “submarining” filings and shell companies to
avoid early disclosure).

Lunney: other issues—you may expose yourself to scams—what are
you looking to do?

A: benefit the public more than TM owners. TM owners don’t
get a lot from their disclosures, but that’s not a problem for him. Looking for
disclosure that will benefit the public.

Justin Hughes: Benefits exist for capital markets by reifying
the right; enable examination of product/service categories and comparison/transaction.

Jason Rantanen: Some of the costs seem more like consequences
of registration rather than consequences of disclosure—the risk of getting a
rejection isn’t a result of disclosing, it’s the result of trying to get a registered
mark. Maybe this is just a quid pro quo, and disclosure is only part of it; the
costs of entering the system (e.g. preparing the application) are also there.

Q: if we take disclosure seriously, would that affect how we
think about unregistered marks?

A: Sort of like trade secrecy v. patent—you could use your
common law TM rights but forfeit the benefits of registration.

Sari Mazzurco, Trademark Law’s Public

Challenge received wisdom that TM is for consumers and
producers. Sometimes that’s all there is, but sometimes TM looks to the
interest of the public at large—doctrines historical and contemporary bears out
that public interest. Historically, statutory bars for scandalous, immoral and
disparaging marks didn’t serve producers or consumers. They show that from the start
TM aimed to serve other interests—public morals, standards of respect. Dilution
by tarnishment is similar.

Equitable defenses also go beyond producers and consumers to
consider the public interest more broadly. Genericness and descriptiveness also
probe into communities of meaning and not just individual consumer’s ability to
determine whether a term communicates the product or the producer. TM protects
an evolving and debatable image of the public.

What’s the public? Isn’t it just an aggregation of producers
and consumers? No, it’s from communitarian democratic theory, concerned with
the common good and not just self-interest. Subject to normative standards of
behavior. When TM serves interests other than consumer and producer
self-interest, the results are more aligned with communitarian theory.

Consider suits over unions’ use of employer TMs; NFTs;
people’s rights to use names after they’ve sold the eponymous brands they
started.

Unions: Starbucks; Medieval Times; Trader Joe’s lawsuits
from employer against employee union. That could in theory be about protecting
goodwill, but it’s also about labor organizing and solidarity. If TM also
sometimes serves the public, it’s not off-limits to interpret/apply the law in
a way that serves labor interests. Whether they should is open to debate, but
they should at least be able to evaluate the question on the merits. Could be
different outcomes [note that the two decided cases involve union victories].

Glynn Lunney: Transition from public writ large to specific
case of unions and others may be difficult. We have specific hooks for the
registration exclusions; post-sale confusion has at least a hook in the statute.
What is the statutory hook here? [Preclusion? Dastar-like analysis for
labor law?]

A: not categorically different from how the 1A has been
incorporated into TM law. Could do something like Rogers. [Although with
labor, the relevant labor statute precludes injunctive relief, which might be
read as doing the harmonizing.]

Hughes: What we want TM to do (protect public morality) is
not the same thing as what we want it not to do (interfere with labor law).

A: we can make them part of TM doctrine—internalize things like
1A limits. [Again, maybe Dastar would be a useful comparator—is that an
internal doctrine or an external one?]

Marlan: Maybe consumer is just incomplete metaphor for
public—everyone is a consumer [at least of ideas, and courts protect political
parties and religions through an analogy to market-based consumption].

A: we should call it what it is then: a public.

from Blogger http://tushnet.blogspot.com/2024/08/ipsc-session-2-copyrighttrademark.html

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IPSC: IP in the Aftermath of the Supreme Court and some TM

Posted on August 8, 2024 by rtushnet

Mark Bartholomew, Publicity Rights After Warhol

Risk that courts will apply Warhol to ROP cases, but transformativeness
is the only element in the ROP defense as defined by the California SCt rather
than a multifactor fair use test. This could make commerciality more important,
given the Court’s focus on commerciality in identifying transformation. Cal SCt
said that commerciality wasn’t important; this could be a substantial change.
Before 2023, Warhol himself was a super-precedent, cited by Cal SCt and others:
he was so important to art that of course his works must be protected.

“Nihilistic” 1A doctrine unconcerned with policy or
normative claims, after Elster. Elster tells us to look for a
tradition of a particular speech regulation; deals with publicity-like
interests in propertizing identity. JDI also suggests looking for track
record [really? It seems just to announce a conclusion to me—confusion provides
all that’s necessary to protect speech]. Transformativeness has a track record
that can be evaluated. One criticism: not protective enough of speech
interests. He thinks it’s pretty protective—Tiger Woods case, Barbara Kruger,
Noriega Call of Duty case. But is it inconsistent/vague? Video game cases
involving college sports—for the most part, video game cases have gone in favor
of game makers; 2013 cases were just conservative (in nonpolitical sense)
courts getting used to a novel form of art, despite SCt’s instruction—the problem
isn’t transformativeness itself.

Eric Goldman: Stuck on first move of accepting that
importing transformativeness was a good idea in the first place. © and ROP are
different things.

Rothman: Right that Warhol will have reverberations
in ROP cases where the jurisdiction uses transformativeness. Transformativeness
is only one of many 1A approaches in the context of ROP defenses. Maybe Warhol
will just harm transformativeness as a defense in the ROP tout court and we’ll
see other defenses. [The uncertainty of Rogers, a major alternative,
also plays in here.] B/c we only looked at transformativeness in ROP cases, we
rejected defenses where the underlying work doesn’t alter the person’s identity
or appearance—that looks really wrongheaded as a dividing line.

RT: One reason transformativeness differs is that © involves
a work to work comparison. To transform a work into another work is not the
same thing as taking a person and … putting them into a work of some kind;
courts divide on whether you have to alter a person’s appearance or put them
into a different context. [This is related to Rothman’s point that things like
newsworthiness—which is not the same thing as transformativeness—are also 1A
defenses.]

Michael Carroll (co-author Peter Jaszi), Campbell at 30: A
Retrospective Appreciation  

Part of a series based on the history of fair use. Warhol’s
callback to Campbell’s parody/satire discussion and other treatment have focused
new attention on how to interpret Campbell. In context, Warhol’s bark is worse
than its bite. Focus on arguments made by lawyers. Congress endorsed an
incompletely theorized agreement w/o contents of fair use being defined. There
is no theory of fair use, and no agreement on principles, in early fair use
cases like Sony. The briefing reflects that. Sony deals with four
factors in one paragraph. Harper & Row decides the case in O’Connor’s
discussion of the common law right of publication, and the factors don’t do any
work in the case. The briefing by the parties is not different.

Campbell is the first time the Court considers the
four factors as providing a statutory test and tries to establish a methodology.
In Campbell, Leval is barely mentioned in the briefs; Acuff-Rose calls
attention to the article at oral argument b/c Leval recants his view on the
value of some quotes. Rehnquist: doesn’t Leval also say you should withhold
injunctive relief? Acuff-Rose says no; Rehnquist says: you want the sweet
without the bitter. The basic analysis comes from Souter’s chambers, and it’s a
bit of a black box. Oral argument and correspondence indicates Justices had
read Leval’s article and welcomed his general theory while quibbling over the
edges. Souter understands parody and satire as subsets of a larger set of
criticism.

Recharacterized after Warhol: should not be significantly
limited. The goal of Campbell was to adopt a general analytical
framework that could be used beyond parody v. satire; the distinction is used
to focus on the user’s reasons for the use. The analysis accepts that a range
of reasons will justify use. Parody/satire is not a targeting limitation or
requirement for a fair use; it illustrates why the user needs to explain the
reason for the use. Post-Campbell case law mostly focuses on additional reasons
for use beyond satire, which is why parody/satire drops away. Warhol’s callback
is there to illustrate that “further purpose” or “different character” needs an
explanation, nothing more. 

The cert pool memo paraphrased QPs as focusing on commercial
use, including Rule of Evidence 301 and presumption against commerciality.
Parody as a form of social criticism; whether © owner has protected interest in
market for parodies even if there’s no competition with any existing parodies
of the original work. O’Connor proposed reformulating the QP as whether the
commercial parody was fair use. This was the first time the Court addressed
fair use as the sole question (Harper & Row was also about
copyrightability), and one without a constitutional overlay in a QP.

After oral argument, all nine vote to vacate; 3 to outright
reverse; Kennedy argued for a presumption in favor of parody, with a pretty
strict definition of parody. Souter resisted, explaining that some works may
not be parody in their entirety and there could be pure parody or mixed, and
criticism without a touch of irony.

Industry advocates asked the Court to roll back Campbell in
GvO and Warhol, but the Court doubled down on transformative use,
which is to the public’s benefit for the range of uses that it permits.

Q: why is Souter so thoughtful in correspondence but not in
the written opinion?

A: it’s still a parody case. As the courts start to see
other user stories, they find the general framework helpful in evaluating the
specific user story. It’s crazy how explicit the logrolling is—as long as we
think they’re not dead wrong, we need their vote on this other case so we’ll
make the requested change.

Rachael Dickson, Administrative Discrimination in the
Trademark ID Manual

The TM ID manual is a searchable database of over 64000
acceptable IDs for goods and services. Strict requirements for goods/services
identifications to ensure proper appraisal: specific, definite, clear and
precise. They do update levels of definiteness required over time—software used
to basically allow “software,” but that’s not true anymore. You can suggest new
additions to the ID manual via email; they’re processed more quickly than anything
else at PTO, within a week usually. ID/Class also makes their own modifications
to update IDs to conform to Nice Classification system (PTO usually requires
more definition than Nice).

Benefits of ID being in Manual: Lower application filing
fees–$100/class. In the future, that will change to $200/class. You get a lot
of guidance on what IDs are acceptable and faster examination. Potentially less
back and forth between applicant/officer. Response times are so bad now that
you want to minimize back and forth. There’s also a legitimacy impact; in 2010,
some cannabis IDs were accidentally added to the manual and filings went up;
went back down when IDs removed. Also true for other goods/services, such as “sex
therapy,” “gay community,” “sex toys,” IUDs; condoms.

PTO also benefits from IDs being in the Manual, in
efficiency and faster examination.

Evidence of discrimination: Customizable/broad (clothing featuring
X, medical services); unusual: “toy figures in the form of a potato”; “financial
evaluation of alpaca fiber.” Missing IDs: medical services relating to abortion
or contraceptives, sterilizations, gender-affirming medical services, sex or
contraceptive education; proctology; other goods/services relating to sex/sexuality.
Various contraceptives and sex toys were added significantly after the Manual
went online; IUDs were added only in 2009. Adult magazines, adult films, etc.
Sex therapy only added in 2024. But prostitution services in Nevada are in
there! There have been federally lawful cannabis goods/services since 2018 with
very specific chemical definitions. Traditional hemp goods are in the manual,
but not cannabis.

May be related to immoral/scandalous refusals (now not allowed).
It does continue the PTO’s decades-long pursuit of “purification” or prudishness
or fear of Congress.

There are no evident standards for which IDs get refused.
Sometimes decline to add things that are already covered. A pro se applicant
wouldn’t know that “medical services featuring X” is available for abortion and
would have to pay extra. They may look at applicant demand (but see demand for
cannabis). They suggest that the goods/services have to be per se lawful, but
that’s clearly not true. Her experience: suggested medical services in the
nature of providing abortions, but that was refused because of the fill in the
blank option, but there are nearly 100 such specific services including “medical
clowning” already in the Manual. Similar refusals for drugs, sex ed on similar
grounds with similar other IDs.

For cannabis, they said that things requiring further inquiry
into lawfulness weren’t eligible, citing gambling and prostitution and other
things that are definitely in the Manual. NFTs can violate securities law but
there’s no lawfulness refusal there.

7 IDs had Christian in them; PTO added some for Jewish and
Muslim religious ceremonies.

This is going to become a bigger problem as higher fees go
into effect. They should make public standards instead of private standards
that are violated all the time.

Goldman: Anarchy! There’s a financial cost to the anarchy
creating legal friction. Why is the PTO creating this huge database of
classifications? Other gov’ts create their own databases—why is this one so bespoke?

A: good question! Wanted to have a useful resource for
applicants and didn’t realize implications of leaving out goods and services.

Jessica Silbey: Ari Waldman has written about “checking the
box” for gender & identity questions—those lists accrete over time and get
sticky/don’t change. Institutional systems/categorization. Danah boyd has
written a really interesting article about census data—how to be both
totalizing and efficient.

Rothman: Maybe the problem is—why do we need such specific
IDs? That seems to open the door to lots of administrative work and discrimination.
And if they had more general categories, do we really need medical clowning as
an ID. Does the elimination of Chevron alter this?

A: They like having definite IDs so it helps you understand
likely confusion. If you just claim “software” then there can be huge
conflicts. Don’t know about Chevron—the ID manual isn’t even a
regulation, just referred to in TMEP.

RT: If you have relative examination, and not just refusal
on absolute grounds, you really need to know the scope of applicant/registrant
services. And if you accept things that aren’t in the Manual, you’ve already
accepted some openness, so you might as well get it right.  I wonder about an APA challenge—there is
clearly Article III standing if you have to pay extra money.

Q: There’s a benefit on the administrative side and a cost
to the user—how do you weight those?

A: Given size of Register, the specific IDs are so useful to
evaluate risk that we shouldn’t take those away—it helps applicants as well as examiners.
(Examiners sometimes won’t accept Manual and require more definition; also the
fill in the blanks options can be abused.) We could reshuffle classes some but
we shouldn’t discriminate against sex/abortion.

Zaneta Robinson, The Likelihood of Confusing AI

Trademark law and language death: languages are dying around
the world. 300-600 languages may be gone by the end of the century. And there
are a lot of registrations. Should not apply doctrine of foreign equivalents in
many circumstances—rebuttable presumption against translation if the
similarities are only connotative. Presumption should be rebuttable using
evidence from corpus linguistics.

Q: Examiners shouldn’t be using Google Translate in the first
place, since it’s bad!

A: Paper gets into that—evidentiary rules for examiners
allow use of online databases or websites, so they’ll use Google Translate.

Rosenblatt: for a dying language, it’s unlikely to be
translated anyway—so is this really part of the problem for dying languages?

A: Examiners have an opportunity to say that confusion is
unlikely, but there can be problems. Office Actions are where the bad stuff is,
not TTAB. Nigerian client may have trouble—due to the increasing use of African
languages in the US, may be considered a common language.

Question I didn’t get time to ask: I think there might be different
issues with non confusion refusals (geographic descriptiveness)—I’m thinking of
the MOSKOVSKAYA decision where the Fed Cir is skeptical that English speakers
would recognize it as a Moscow-formative. How would a presumption against
translation work when the underlying words are generic or descriptive for the
goods/services? A risk of cultural appropriation?

Betsy Rosenblatt, Schedule A Pleading, Trademark Overreach,
and the Role of E-Commerce Platforms

Starts w/overreaching Schedule A lawsuits against a fan artist
making Sherlock Holmes fan art. Not a counterfeiter. Not acting in concert with
others named. The registrations aren’t for the relevant goods. Eric Goldman and
Sarah Burstein have written about Schedule A litigation as trolling. Often the
complaint is so redacted that the alleged infringer can’t find out what the
accused marks are; the host sites like Etsy/Redbubble just take whole store
down and freeze accounts. This could have been a C&D to the cite, under eBay.
Then there’s the ransom: to get unfrozen, pay us a significant amount. NDIll in
particular is open to this even though these lawsuits are civ pro nightmares.
They don’t satisfy Twiqbal because they don’t examples; there’s no
evidence of jurisdiction; no use of int’l service of process; joinder is all
wrong; sealing and redaction is unjustified; lack of inclusion of platforms is
unjustified under Rule 19 and they should be included parties; default means
none of this is ever adjudicated. The complaints are full of xenophobia—how bad
Asians are.

INFORM Act should make this all unnecessary—TM owners said
that they don’t know who the sellers are, but INFORM requires this information.

Q: Why NDIll?

A: some companies found the vein, starting with what may
have been marginally legit albeit corner-cutting claims against counterfeiters.

from Blogger http://tushnet.blogspot.com/2024/08/ipsc-ip-in-aftermath-of-supreme-court.html

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IPSC Opening Plenary Session

Posted on August 8, 2024 by rtushnet

IP Outside the (Doctrinal) Box

Andrew Gilden: Love & Hate in IP

IP’s struggles with joy, pleasure, and fun—happens with sex,
but also with enjoyment. Courts are pretty openly hostile to statements by Ds
that they enjoyed engaging in the disputed conduct. Fandom—Polychron (LoTR), Axanar
(Star Trek), Harry Potter Lexicon. Fandom is considered a reason to rule
against the D. “Perhaps because Vander Ark is such a HP enthusiast, the Lexicon
often lacks restraint in using Rowling’s original expression.” Also, efforts to
entertain fans are seen as a reason to impose liability: fans’ pleasure as what
the IP owner owns. Making people think differently about a work: fair. Fans are
framed as hungry, passionate, horny. Anti-fandom or alienation from the work is
more likely to be found fair. Lombardo v. Dr. Seuss, Adjmi v. DLT Entertainment
(Three’s Company, Adjmi talks about finding pop culture baffling and
alienating); Lyons v. Giannoulas (D really hated Barney the dinosaur).
Appropriation art: see a distinction between celebration and detachment. Cariou
v. Prince finds fairness in many images when Prince didn’t care about other
artists; Graham v. Prince rejects fair use when his stated intent was to have
fun. Critical distance from work matters.

Sexual pleasure: when mark is used to “titillate” or convey
a message that sex is good, that doesn’t establish parody or commentary.
Copyrightability of sex toys: court says that providing sexual pleasure is a
purely utilitarian function, not creative. Stimulating the mind is not
separable from stimulating the body. But insulting someone, including by degrading
them sexually, is more likely to be found fair/parodic. Disdain as paradigmatic
fair use. Mattel v. Pitt: Dungeon Doll is fair use in the context of sexual
slavery and torture. Catcalling in Campbell.

IP cases privilege violent sexuality over affirming,
light-hearted sexuality.

By contrast: having fun is not privileged. Buckyballs case;
Jack Daniels v. VIP—amusing dog owners is not a relevant interest. But outright
mocking does better. Thus, butt-related parodies are less likely to be
confusing—Buttwiper, Lardashe. Insult as litigation strategy: Jim Henson made
sure to mock Spam in the Muppets case.

Harms of the pleasure taboo: (1) rejects lived experience of
creativity: creativity feels good; (2) if you admit to having fun, it weakens
your case, so that discourages you from telling the truth/encourages you to tap
into your childhood trauma; intellectualize motives; (3) turns fun into
something owned by the IP owner. Most fandom involves a combination of love and
hate; but IP encourages downplaying the celebration in mix of celebration and
critique. Punishing things that are incentives for creativity is bad, actually.
Market failure explanations exist, but the flip side is that joy and pleasure
end up seen as commercial property.

Recommendations: think critically about love and hate; hate
and pain can be silencing; calling a woman ugly is not the proper paradigmatic
example of fair use. Happy-talk rules are bad and viewpoint discriminatory
according to the Court in Elster; but so are awful-talk rules.

Peter Lee, Synthetic Data and the Future of AI

ML models and training data

Real world training data can be difficult and expensive to
gather; needs to be cleaned and label; high cost of acquisition contributes to
concentration in ML field. Threats to privacy: personal info used as training
data. Real world data may have biases—African Americans have lower historical
health care expenses b/c they have lower access, but ML may interpret that as
lower needs. Copyright infringement claims: uncertainty creates enormous risk
for ML developers.

Synthetic data is artificially created; has a recursive
character. AI models create synthetic data to train other models. Estimate: by
end of this year, 60% of training data will be synthetic. Varies in how
synthetic it is—could rotate an image 15%; augmentation/modify an existing
dataset. Model-based synthetic data (deepfakes used to train); synthetic environments
like simulated driving space. Training on fictitious records can minimize
privacy concerns, fill in gaps of RW datasets for underrepresented populations;
avoid © infringement, in theory, though may simply shift issues upstream. But
it can be low quality; leak information, too similar to reality, amplify
real-world bias. It can also be too different from the real world; “model
collapse.”

Innovation mechanisms to ensure robust, responsible development
of synthetic data: Law & policy are inputs into the creation of synthetic
data. Three objectives: provisioning high quality data; disclosure of data and
methods to promote validation; democratization of access and multiple sources
of synthetic data generation.

Jacob Noti-Victor, Regulating Hidden AI Authorship

Marvel got in trouble/claimed that AI was only used to
supplement humans; it’s getting hard to tell in many cases what’s AI generated.
Creates incentive to hide use of AI. Also problems with copyrightability create
incentive to hide AI origin.

Are consumers harmed by failure to disclose? Consumers have
preferences for process—like ethically sourced coffee. Authenticity concerns;
concerns for fandom/connection to the artist. Artists have recourse for
appropriation of voice or likeness, but maybe artists license their voice or
likeness and so they are ok and the consumers are the ones who lose out. Of
course, AI is supplanting a lot of authorial agency—that creates a contrast
between assistive uses (editing) versus generating main plot points plus a teeny
bit of human tweaking. Copyright Office guidance is actually similar to what he
thinks is a good distinction. Prompting an AI system isn’t enough; something
more is needed. [Editing doesn’t make someone an author in our system of joint
authorship!]

How do we incentivize disclosure? Industry might self-regulate.
Watermarking; certification. Mandatory disclosure legislation; FTC enforcement;
IP could be used as information forcing if we used copyright misuse to raise
the financial stakes of nondisclosure. Fraud on the CO is not serious, but
misuse could be.

Jennifer Rothman, The IP Exception to the First Amendment

The SCt is intentionally not giving more robust 1A review
and giving IP claims a pass or differential/bespoke/lesser scrutiny—lower-value
speech when you use someone else’s IP. The idea of this project is to take that
seriously: what if they’re right, by their own lights? If we take it seriously,
what are the opportunities to increase predictable outcomes or develop more
speech-protective outcomes?

In 2003, Eugene Volokh said it was “unfortunate” the Court
hadn’t heard more 1A/IP cases, but 20 years later, they have. (The monkey’s
paw!) He hoped for more clarity and also more rules favoring speech like
putting the burden on showing lack of fair use on the plaintiff. These decisions
are not, as
Lemley/Tushnet say, at odds with the Court’s other 1A jurisprudence, but
consistent with a history of treating IP differently. (I think those are … the
same thing, described differently?) A descriptive, not a normative project: the
IP exception to the First Amendment. She thinks Elster shows she’s
right. [OK, since I got called out by name, note that Elster represents—and
Barrett’s concurrence shows that she understands it to represent—a very different
approach to the 1A than other cases, including other IP cases, although there’s
a surface resemblance to Eldred. Elster and Rahimi are
clearly about the same questions about history and tradition, even if they’re
about different amendments. (Even JDI doesn’t give us 1A theory/a theory
of 1A coverage and protection; it just announces a conclusion.) The history and
tradition view of the 1A would—as Thomas very much wants—rewrite the rest of 1A
doctrine. And that might happen! But this is not a continuity story; rather, it’s
part of the Trump Justice revolution.]

Idealist vision of IP and 1A: (1) IP laws are content-based
speech restrictions; (2) no exception applies; (3) strict scrutiny applies. (1)
was controversial 20 years ago, but now isn’t. (2) is where the fight is. (2)
seemed to die with Eldred because of the definitional balancing in ©.
But now that seems to be a broader story: you can’t use other people’s property
to make your speech. It’s not just a © exception, but an IP or property
exception to free speech. We see this in claims not justified through the Progress
Clause. INS v. AP; Zacchini; SFAA (Gay Olympics); Elster.
You can also limit speech to get more and better speech. INS; Zacchini.
[But see NetChoice v.
Moody, this Term, the same people say: “But this Court has many times
held, in many contexts, that it is no job for government to decide what counts
as the right balance of private expression—to ‘un-bias’ what it thinks biased,
rather than to leave such judgments to speakers and their audiences.”] Her list
is a pantheon of hated IP cases, sure, but they are there. The Court loves them
and cites them a lot! [I’m not sure this is numerically true, but it’s
certainly a fair characterization of Elster. That’s why the
speech-promotion rationale for an IP exception contradicts the rest of 1A law.]

Court sees this as competition policy, not speech, which is
why there’s a lot of focus on fairness. Market annihilation cases are key: Harper
& Row; Zacchini; Warhol—worried about destroying the
market for photographers and their work. INS also fits.

Limiting speech to get more speech is a broader notion than
just IP. [I wrote
something about this.] Not anomalous in IP: heckler’s veto cases limit
speech to get more speech; TPM cases are like that. [This, by the way, is why
content-based distinctions have been very important in doctrine: TPM
restrictions and heckler’s veto cases are not content-based.] Compelled speech
concerns loom large—the Court doesn’t like that and disfavors compelled speech.
[This is one thing Lemley & I talk about when we talk about the sudden
shift in the treatment of corporate speech, most
on display in the 5th Circuit but also showing up in the
disclosure parts of the NetChoice cases.]

She would bet a lot of money that dilution is constitutional
absent viewpoint discrimination. Commercial use is not a likely dividing line
given the property framing. People aren’t facts: they’re protectable property.
[This is a version of Thatcher’s line that there is no such thing as society,
as if you could carve off a person from the environment in which she exists.
The Court majority is not coconut-pilled.] Therefore, countervailing stories
about competition and property would be good—the public domain as property. [This
was the 10th Circuit approach in Golan that the Court didn’t
deign to mention.] Implications beyond IP: access to property, as in NetChoice
and physical spaces; access to data. Propertizing privacy might succeed
(although alienability is a big issue). Limiting speech to improve speech can
be harnessed to limit deceptive political ads and other deceptive uses of AI

If we don’t like it, we should focus on shifting the
property-speech balance more broadly. Overpreferring property—Justice Marshall’s
dissent in Lloyd v. Tanner.

SCt has long preferred property to speech. [This is why I
have trouble thinking that there’s much good room to work in this framework.
The “property is different” justification is different from the “suppress
speech to get more and better speech” justification,” and doesn’t authorize the
same things. Compare: give the US a property right in the US flag and ban flagburning;
give people a property right in their reputations and ban true but damaging
statements. Only if “suppress speech to get more and better speech” is why
IP is different do you get potential links to misinformation, campaign finance,
etc.—and linking tangible property to IP works against, not for, that without a
lot of additional work and a progressive view of the affordances of tangible
property that, it seems fair to say, will not get much traction with this
Court.]

Lemley: if it can be characterized in some way as IP, it is
therefore property—that’s a crucial step in this. People are not property!
Maybe one way to rethink this is not to rethink land, but about how to challenge
the link between IP and land.

Rothman: agrees that IP is different from tangible property.
Not suggesting we should treat IP more like property in land, but SCt has, and
has for a long time, put IP in the “property” basket. We can argue that they
shouldn’t do that, but if that’s how it’s being conceptualized, then is there a
way to navigate that to get some results that are more speech-protective? [Note
that much of this doesn’t seem internal to IP; it’s more “use the rule that it’s
ok to suppress some speech to get more speech outside of IP to get other non-IP
regulations we like” which has different implications.] [This treatment—which I
think is real descriptively—is also frustrating for a 1L property teacher who
spends an entire semester on the concept that the label “property” is the
beginning of the inquiry rather than the end—with what boundaries? With what ability
to interfere with others’ freedom of decision/movement?]

For Gilden: people hate criticism and love praise; no one
will license criticism, so we need a free speech regime for that. But you can
turn that around by showing all the situations in which people will not license
praise. And refusals to license could even be turned around to show that we
should treat things that don’t seem critical should also be favorable.

Gilden: people are not often suing over lost market—they have
privacy or dignity concerns. Parody/loss of market isn’t really what’s going on,
on either side.

Q for Gilden: people in this room may really enjoy
criticism!

A: yes, there is not a bright line; we should think
critically about both sides of the equation. Being involved in a hateful
political movement can feel really good; that doesn’t make it good. Love v.
hate is not a good divider; what are we trying to do and what is the impact of
expressions of love and hate on the relevant interest?

Betsy Rosenblatt for Lee: why wouldn’t synthetic data
exacerbate these problems by being generated from existing garbage? [E.g., how
do you generate missing data for groups you haven’t actually gathered data
from?]

Lee: it’s definitely true that there is high and low quality
synthetic data. This is one reason to use open source: communal efforts to
understand how people use these processes and engender trust. Requires judgment
about how the synthetic data should differ from real world data; otherwise can
make the bias much worse.

from Blogger http://tushnet.blogspot.com/2024/08/ipsc-opening-plenary-session.html

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“fair and skill-based” may falsely imply absence of bots in online gaming

Posted on July 29, 2024 by rtushnet

Skillz Platform Inc. v. Papaya Gaming, Ltd., 2024 WL
3526853, No. 24cvl646(DLC) (S.D.N.Y. Jul. 23, 2024)

Skillz sued its competitor in mobile gaming, Papaya, for
violating federal and NY law against false advertising by falsely advertising
that its games pit human players against each other when in fact Papaya uses
bots masquerading as human players.

Skillz alleged that its platform matches users with similar
skill levels in one-to-one tournaments. Skillz does not use artificial
competitors, i.e., “bots”, in its cash competitions. Like Skills, Papaya
allegedly offers cash competitions in which players are matched by their skill
level; unlike Skillz, Papaya hosts competitions with up to twenty players.

Papaya allegedly advertises that players will “be matched
with other players within the same skill level … so the game is totally fair
and skill-based.” Also: Papaya “make[s] sure to match players against other
opponents with a similar skill level to ensure a fun and fair experience for
everyone.” It allegedly advertises that its cash tournaments are available “to
all players over the age of 18.” In its Terms of Use, Papaya states that the
“individuals who better use their relevant skill and knowledge and accumulate
the highest scores will be the winner(s).” However, unlike Skillz, Papaya
allegedly does not provide a function to allow players to chat with each other
or give access to a competitor’s gaming history. Reviews have complained that
Papaya uses bots to play against them.

The complaint sufficiently alleged implied falsity. References
to “players”, “individuals”, “winners”, “fair” and “skill-based” “may be found
by a jury to imply that Papaya’s games of competition are conducted among human
players only and not among humans and bots.” Explicit “no bots” statements
weren’t required for implied falsity. Also, it doesn’t matter that using bots
wouldn’t necessarily make the games unfair. “The issue is not whether bots have
been unfairly employed but whether consumers were misled about the presence of
bots in the game.”

The complaint plausibly alleged materiality, because humans
v. bots was a “material quality” of the platform, and the negative online
reviews complaining about bots reinforced materiality, whether or not they were
admissible at trial.

And the complaint plausibly alleged injury, because it
alleged that, in this online gaming world, players are not likely to switch
between platforms once they have decided on which to join. “Instead, they are
motivated to build up in-game rewards and accomplishments on a single platform.
Accordingly, when players have joined Papaya because of its false advertising,
these players are often lost to its competitors.” Even if its damages are
difficult to quantify, Skillz could still obtain injunctive relief and
disgorgement.

The NY GBL claim survived for similar reasons.

 

from Blogger http://tushnet.blogspot.com/2024/07/fair-and-skill-based-may-falsely-imply.html

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“Pure Irish Butter” plausibly misleads as to absence of dangerous chemicals

Posted on July 25, 2024 by rtushnet

Winans v. Ornua Foods North America Inc., — F.Supp.3d —-,
2024 WL 1741079, No. 2:23-cv-01198-FB-RML (E.D.N.Y. Apr. 23, 2024)

Plaintiffs alleged that the presence of per- and
polyfluoralkyl substances (“PFAS”) in Kerrygold butter made the use of “pure Irish
butter” into false advertising under NY law. The court declined to dismiss the
complaint. Additional background: “[I]n early 2023, in response to a New York
state law banning PFAS in food packaging, Ornua issued a recall of the
Kerrygold Butter Products because the packaging contained PFAS. Exposure to
PFAS — a category of synthetic, artificial chemicals often called ‘forever
chemicals’ — is linked to fertility issues, developmental delays, increased
risk of cancer, increased cholesterol and obesity, and reduced immune response
and can be dangerous even at low levels.”

Prominent “Pure Irish Butter” on Kerrygold packaging

First, Ornua argued that Winans failed to plausibly allege
the presence of PFAS, depriving her of standing. The court disagreed:

The parties do not appear to
dispute that Winans purchased Kerrygold Butter products with packaging that
contained PFAS. The question is thus whether Winans has alleged that the butter
itself contained PFAS. To make that link, Winans posits the migration theory,
whereby the PFAS migrated from the packaging to the butter, which she supports
by citing several studies establishing other instances of PFAS migrating from
packaging to food products.

That was plausible. Lab tests were not required at this
stage. “Certainly, a testing requirement might be sensible in cases where there
is no reason to otherwise believe that a product contained PFAS. But here,
where Ornua publicly removed its products because the packaging contained PFAS,
Winans’s allegations suffice.”

Misrepresentation: Ornua argued that “pure” modified only “Irish,”
not “butter,” so it meant “butter purely from Ireland,” rather than “pure
butter from Ireland.” Deceptiveness is generally a fact question, and it was plausible
that a reasonable consumer reading the label would conclude that the adjective
“pure” modifies the noun, “butter.” Indeed, Ornua’s reasoning was less plausible;
the court noted that “pure Irish butter,” rather than “Irish pure butter” obeyed
“the standard ordering of adjectives in English.”

Omission-based claims also survived; Winans plausibly alleged
that Ornua knew of the problem. She alleged that “(1) Ornua exclusively
controlled the contents of the Kerrygold packaging that contained PFAS; and (2)
Ornua recalled its Kerrygold Products in response to a New York law banning
PFAS from packaging, which suggests that Ornua was at the very least aware that
its packaging did contain the chemical. It seems at least plausible that Ornua
may have suspected that the PFAS could migrate from the packaging to the
product.”

Nor did federal law preempt the omission-based claims. FDA
regulations exempt from disclosure requirements “[i]ncidental additives that
are present in a food at insignificant levels.” These “incidental additives”
include “[s]ubstances migrating to food from equipment or packaging or
otherwise affecting food.” But whether the levels were insignificant was a
factual question.  

However, Winans lacked standing to seek injunctive relief.

from Blogger http://tushnet.blogspot.com/2024/07/pure-irish-butter-plausibly-misleads-as.html

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No copyright over simple colors and shapes used to annotate X-rays

Posted on July 25, 2024 by rtushnet

Overjet, Inc. v. VideaHealth, Inc., 2024 WL 3480212, No.
24-cv-10446-ADB (D. Mass. Jul. 19, 2024)

The court denied Overjet’s request for a preliminary injunction
on copyright and false advertising claims, concluding that Overjet’s selection
of colors and shapes for annotating dental x-rays was unlikely to be protected
by copyright and that the literally false statements identified by Overjet had
been removed, thus preventing a finding of irreparable harm.

“Overjet uses AI to scan dental radiographic X-rays and
detect dental diseases. Specifically, Overjet uses an approach called
segmentation, which outlines exact borders and shows the extent to which
pathologies, or diseases, exist.” Its software “annotates diseases and
structures on dental X-rays,” which “allows clinicians to better detect
diseases and devise treatment plans.” It’s presently the only dental AI company
with FDA clearance for “performing dental detection and segmentation to outline
exactly where pathologies exist.”

In fall 2023, Overjet launched its “Anatomical Structures
Visualization Tool” for Overjet Caries Assist, which introduced the relevant
coloring scheme and design. The tool uses “white to represent enamel, purple to
denote the pulp of a tooth, bright green lines with circles at the ends to
indicate measurements of bone levels, and red and translucency to mark areas of
decay.” [Id. Overjet allegedly chose these colors and shapes in order to create
a “contrast with the gray scale” of the X-rays and with the ultimate goal of
assisting with “patient assessment, diagnosis, and treatment planning.” It also
allegedly “selected the design and colors to help with brand identification;
the purple, for example, complements Overjet’s purple brand color.” Example
image showing use of red, white, purple, and green lines ending in dots: 

Videa is a competing dental AI company. In December 2023,
the FDA cleared “Videa Dental AI,” for “identifying and localizing a range of
dental findings and indications, including caries or cavities and periapical
radiolucency, when analyzing bitewing, periapical, and panoramic X-rays taken
from patients three years of age and older.” If the software detects any
indications, it “returns a set of bounding boxes representing the suspect
dental finding.” Unlike Overjet, VideaAI offers a Clinical View and Patient
View; the former “uses boxes and lines with dots to quickly display … points of
interest.” Patient View, at issue here, is designed to be a “communication tool
for [ ] provider[s].” and offers “a version of the results that are ‘segmented’
and highlights the shape of the points of interest” by “show[ing] more than
mere lines and boxes.”

 Example; patient view with red areas, blue, white, and greenish lines with circles:

Videa beat Overjet out of a lucrative partnership with a
large dental client.

Copyright: Overjet’s copyright protected its source code,
but there were no allegations of code copying. Instead, it alleged copying of its
“coloring scheme, shades, and shape.” First, there were real questions about
whether actual copying occurred, given the timeline, which I won’t get into,
though those questions are related to the existence of protection for, e.g.,
selecting green as the color for healthy gum levels, yellow for some risk,
orange for higher risk, and red for a “potential problem.” Videa argued that it
chose this “stoplight” system because it was “intuitive for patients and clinicians.”
Likewise, it argued that red boxes to indicate tooth decay was an “obvious
color choice to indicate warning … and commonly used across industries.” Videa
further argued that it used white to indicate enamel and blue to demarcate pulp
was made “because white is the color of enamel and blue provides contrast to
render pulp more visible.”

Second, the color scheme, shades, and shapes were not
sufficiently creative/concrete to get copyright protection. The court began
with 17 U.S.C. § 102(b): “In no case does copyright protection for an original
work of authorship extend to any idea, procedure, process, system, method of
operation, concept, principle, or discovery, regardless of the form in which it
is described, explained, illustrated, or embodied in such work.”

The court found that Overjet’s claim to shapes, colors, and
shading defined the relevant “abstraction” for the infringement test. The next
step was filtration: eliminating unprotectable elements. Functional elements
are uncopyrightable. The scheme here seemed functional:

The underlying impetus of the color
scheme and display is seemingly to aid clinicians in carrying out dental
diagnostics.. Thus, although there may not be industry-standards or guidelines
specifying what colors and shapes may be used on an X-ray, it nevertheless
appears intuitive to use certain specific colors to indicate problem areas or
create contrast in order to efficiently identify pathologies, suggesting that
Overjet’s color, shape, and shading decisions were primarily driven by
functionality.

Overjet’s own complaint indicated that the tool was “a
tremendous aid in patient education …. Highlighting enamel and pulp allows for
a richer understanding of the nature and severity of disease progression and a
visual that matches dentists’ quantified AI finding.”

Relatedly, the individual colors and shades did not rise to
the necessary low level of creativity. Although the “selection, coordination,
and arrangement” of elements that are by themselves not protectable may
nonetheless meet the originality requirement, that wasn’t the case here. It did
not seem to the court that “countless artistic decisions” were possible, as they
would be for turning a real animal into a stuffed toy. Overjet “organized and
arranged only four colors (red, white, purple, and green) and two shapes (a
line with circles at the end).”

False advertising:

Overjet challenged statements that allegedly falsely
indicated that (1) “Videa’s software is safe and effective for various medical
purposes,” even though it had not obtained the relevant FDA clearance, and (2) it
had “reached a technological milestone in AI development before Overjet.”

For (1): In a now-deleted LinkedIn post from December 2023, Videa
stated, “[h]ear from the clinicians who are experiencing firsthand VideaAI’s
transformative power.” [The X-ray accompanying the statement allegedly implied
that Videa had FDA clearance for segmentation when, in reality, the FDA had
only cleared Videa’s “bounding box” approach. But “[b]ecause Videa is in fact
an AI platform, the statement is not explicitly false. The Court cannot,
however, without the benefit of the full LinkedIn post, assess the extent to
which Videa’s statement, in light of the accompanying X-ray, is misleading, and
refrains from evaluating Statement # 1 under the first prong of the Lanham Act
at this juncture.”

In 2021, Videa represented that its AI software can “aid in
the diagnosis and prediction of the progression of diseases such as caries or
periodontitis.” But Videa has not been cleared for progression analysis. Video
argued that it “merely provides this comparative tool to aid clinicians’
analyses.” The court found that the challenged statement emphasized the
benefits of “AI within diagnostics and treatment planning,” [Ex. 27 at 2], and was
neither false nor misleading. Its software localizes and identifies various
dental indications in X-rays using bounding boxes. “In comparing these
AI-generated annotated X-rays over time, clinicians can assess the extent to
which certain conditions, including caries and periodontitis, have progressed.”
Thus, the statement didn’t communicate that Videa provided progression
analyses or that Videa had obtained FDA clearance for conducting such analyses.
Similar analysis applied to Videa’s statement that its “artificial intelligence
software … helps gauge the caries level in carious lesions.” (The court also
noted that, when the blog post was published, it contained an “investigational”
disclaimer; that disclaimer was removed when Videa obtained the relevant FDA
clearance.)

In 2024, Videa blogged that “[w]e suggest choosing an AI
provider with the most FDA-cleared annotations.” According to Videa,
annotations are “not equivalent to segmentation,” for which it’s not cleared, but
rather refer to “a visual way of showing the results of AI analysis, which can
take many forms, including a simple bounding box.” This wasn’t literally false,
because Videa had just obtained FDA clearance for thirty plus indications. Nor
was there a necessary implication that “annotation,” that is, labeling an
X-ray, refers to FDA clearance for segmentation. That was too attenuated.

Overjet argued that the statement was misleading because the
image right above the alleged misrepresentation is captioned “VideaAI’s patient
view showing a segmented x-ray,” which could create an implied connection
between “annotations” and “segmentations,” but there was no evidence of actual
deception.

However, another ad, a segmentation view with the caption
“[i]ntroducing the first FDA-cleared dental AI for patients aged 3 and up,” whose
images were subsequently replaced, could lead a viewer to recognize the claim that
Videa obtained FDA clearance for segmentation as “readily as if it had been
explicitly stated” because of the combination of the image sand text.

Videa also stated that it is the “only dental AI company to
spend time and money to retest and improve [caries] models.” Overjet argued
that it had also done so, submitting a new iteration of its model after the FDA
cleared it, and the court agreed that this rendered the statement literally
false. Likewise, an initial statement that “[p]roviders can use VideaAI to help
diagnose all patients, regardless of age” was literally false; it has been
modified to “[p]roviders can use VideaAI to help diagnose all patients 3 years
and older.” And another removed statement, “[t]he world’s first pediatric
dental AI” was literally false because Overjet obtained clearance for pediatric
patients—at least 12,efore Videa did, even though it was the first to receive
clearance for patients 3 and older. “Pediatric care refers to the treatment of
infants, children, adolescents, and young adults, and commonly encompasses all
ages up to twenty-one years old.”

Another statement that VideaAI could “identify cysts” was
potentially false, even though it was FDA-cleared for periapical radiolucency
(“PRL”) detection, which includes cysts; identifying a PRL might not be the
same thing as identifying a cyst. So too with a statement that Videa’s software
“annotates 18+ months of historical images to help monitor and track
progression of disease.” The software itself doesn’t track or quantify progression,
but seeks to assist clinicians in assessing side by side comparisons of
annotated X-rays. Although the statement was literally true, an image captioned
“Current Visit” indicates that the subject tooth’s caries size has increased by
20% since the previous X-ray was taken. That image, coupled with the statement
that Videa’s “AI annotates 18+ months of historical images to … track
progression of disease,” could suggest that the software—rather than the
clinician—evaluates the progression.

Of the surviving statements, there was “scant” support for
materiality. Statements focusing on the idea that Videa’s AI software can aid
in the diagnosis and prediction of various diseases didn’t seem material. But
references to VideaAI’s pediatric qualities were more plausibly material. Nonetheless,
Videa sells to sophisticated customers such as dental practices and services,
who “likely have the scientific and technological understanding to fully
appreciate Videa’s product offering and its limitations.”

Online advertising and
presentations during trade shows appear to be a starting point for potential
purchases, but do not alone drive such decisions. It is reasonable to assume
that, given the actors involved and the considerable monetary value of potential
contracts, the sales process is thorough and lengthy, with a heavy focus on the
software’s actual capabilities, including relevant FDA clearance.

What about bait and switch reasoning?

There was also no evidence of actual deception. “It seems
reasonable that discussions surrounding relevant FDA clearance—and verification
thereof—are a critical component of the sales process. A few promotional videos
and blog posts, it appears, are unlikely to cause consumer deception among the
relevant pool of potential consumers.”

Nor did Overjet show injury from the deception. This also
prevented a showing of irreparable harm, especially as the literally false
statements have been removed.

from Blogger http://tushnet.blogspot.com/2024/07/no-copyright-over-simple-colors-and.html

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Trademark law and LinkedIn resumes: watch out?

Posted on July 25, 2024 by rtushnet

Portkey Tech. PTE Ltd v. Venkateswaran, 2024 WL 3487735, No.
23-CV-5074 (JPO) (S.D.N.Y. Jul. 19, 2024)

Another case that starkly shows the effects of trademark’s
abandonment of any harm requirement, not to its benefit, where false
advertising claims fail because alleged misstatements about the extent of the
defendant’s past involvement with a company don’t do it any identifiable harm,
but trademark claims succeed because something something affiliation. (Maybe
companies can resurrect noncompetes by prohibiting uses of their trademarks in
former employees’ resumes! This is a joke, but that doesn’t mean it won’t
happen.)

Portkey sued for unfair competition/reverse passing off,
false advertising, and trademark infringement under the Lanham Act, as well as
related state-law claims. It alleged that plaintiff Vignesh Sundaresan is the
founder and sole proprietor of Portkey, a “software and technology company that
operates many of Sundaresan’s blockchain, NFT, and Web3 projects.” Venkateswaran
allegedly worked as an independent contractor for Portkey from 2017 to 2022,
during which Venkateswaran performed work in areas like “communications and
public relations,” “management of social media platforms,” and “attending and
representing in conferences.” Sundaresan allegedly directed Venkateswaran and
others at the company to adopt the alias “TWOBADOUR” when communicating with
the public, and to “assist in the operation of METAPURSE,” which is “a fund
utilized for the acquisition of digital art NFTs and virtual land NDTs, and
other Web3-related investments.”

In 2022, the relationship dissolved; Portkey objected to
Venkateswaran’s alleged references to Portkey and its asserted trademarks since
2022. “Venkateswaran publicly lists his former work at Portkey—including use of
the TWOBADOUR alias and involvement with METAPURSE—on his ‘bios’ on Twitter and
LinkedIn and has allegedly continued to associate himself with those projects
in his public and private statements.”

This is the Second Circuit, so nominative fair use is just a
set of considerations to put into the hopper, and it’s almost impossibly
difficult to kick out an infringement claim on a motion to dismiss without
something like “clear parody or a total absence of proximity between the marks.”

Here, the marks in question were
used at the top of Venkateswaran’s public profiles, directly proximate to his
current business ventures. Sometimes Venkateswaran noted a past affiliation
with TWOBADOUR and METAPURSE, but other times he did not. And sometimes he used
terms that may still lend themselves to confusion (such as abbreviating
“Former” into “Fmr”). For example, the First Amended Complaint alleges that
Venkateswaran included on LinkedIn that he was the “Fmr Steward of Metapurse,”
but then simply “Creator of the @Twobadour pseudonym.” Even if Venkateswaran is
correct that an indication of former affiliation is not likely confusing as a
matter of law, that would not shield the alleged reference to the TWOBADOUR
mark, which at least on LinkedIn lacks an indication that the affiliation had
ended.

Anyway, you can’t use “any indication of non-affiliation” to
avoid an infringement claim, per JDI. “It still may be that some
disclaimers or other explicit indications of non-affiliation will be enough to
render consumer confusion unlikely, but whether that is true in this case will
depend on facts not yet before the Court.” This bore on the similarity factor: “arguments
about explicit indications of non-affiliation go to similarity.” And because the
text of the alleged marks was similar (which will always be the case in any
truthful reporting of former employment), and there was a disputed issue of
fact about whether “former” and the like mattered, similarity weighed in favor
of confusion.  

The court specifically noted that actual confusion was not
plausibly alleged because the allegations were conclusory, but that didn’t
matter. By contrast, allegations that defendant had “actual knowledge that
Plaintiffs own all rights, title, and interest in the trademark METAPURSE,” that
such references “have been willful, wanton, and in bad faith, and with intent
to misrepresent Plaintiff’s business operations and successes as that of his
own,” and that Venkateswaran “is attempting to exploit Plaintiff’s reputations
and intellectual property to intentionally cause confusion among investors,
artists, artist estates, trade conference organizers and organizations,
scholars, publishers, and other market participants, hoping people choose to do
business with him and his associated businesses, mistakenly believing that …
he remains associated with Plaintiffs and their business” plausibly alleged bad
faith. What’s the difference?

The NFU factors didn’t help because they were “often heavily
factual and thus ill-suited for the motion-to-dismiss stage.” Most notably,
“the third element of the nominative fair use defenses requires that the use of
the trademark not create a likelihood of confusion as to the mark-holder’s
sponsorship, endorsement, or affiliation … the existence of [which]
necessitates focusing on ‘the minds of the relevant purchasers—an analysis
based on a factual inquiry inappropriate to a motion to dismiss.’ ”

There was also “use in commerce” because Venkateswaran was
promoting himself and his business ventures on LinkedIn.  

Reverse passing off claims, however, failed. Plaintiffs alleged
that Venkateswaran represented to the public that he was more involved with the
creation and management of TWOBADOUR and METAPURSE than he actually was, thus
“passing off” the goods and services sold under those marks as his own. Under Dastar,
prior involvement in the creation and promotion of a trademark is not “origin” of
tangible goods or services, and thus misrepresentations as to same aren’t misrepresentations
of “origin.”

False advertising: Plaintiffs didn’t plausibly allege “economic
or reputational injury flowing directly from the deception wrought by the
defendant’s advertising,” which usually occurs when “deception of consumers
causes them to withhold trade from the plaintiff.” Where there is no allegation
of a comparative advertisement, §43(a)(1)(B) requires “some affirmative
indication of actual injury and causation.” There were no allegations of
literal falsity, only “a subjective disagreement among the parties concerning
the degree of Venkateswaran’s prior involvement with the business.” Nor did
plaintiffs allege reputational damage.

State law consumer protection claims also failed because
they didn’t allege harm to consumers; trademark confusion isn’t sufficient.

Puzzlingly, the court did find state law dilution plausibly
pled because plaintiffs alleged that “Venkateswaran acted with hostility to
Sundaresan’s and Portkey’s marks” and thus had predatory intent.

from Blogger http://tushnet.blogspot.com/2024/07/trademark-law-and-linkedin-resumes.html

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Announcing the Seventh Edition of Advertising & Marketing Law Casebook by Goldman & Tushnet

Posted on July 23, 2024 by rtushnet

Eric Goldman and I are pleased to announce the seventh edition of our casebook, Advertising & Marketing Law: Cases & Materials. It is available for purchase in the following formats:

* DRM-free PDF file. Price: $12
* Kindle. Price: $9.99
* Print-on-demand paperback from Amazon. Price: $30 + shipping and tax. Paperback buyers can get a free PDF file by emailing me a copy of their receipt showing which edition they bought.

If you are a professor, or are hoping to teach the course, and would like a free evaluation copy, please email Eric (egoldman@gmail.com).

A sample chapter, Chapter 14 (on publicity rights and endorsements), is available as a free download. We also have two online-only chapters on housing discrimination (Chapter 20) and political advertising (Chapter 21), both also freely downloadable.

We’ve discussed the book’s background and our goals as authors in this essay.

What Does the Book Cover?

Preface
Chapter 1: Overview
Chapter 2: What is an Advertisement?
Chapter 3: False Advertising Overview
Chapter 4: Deception
Chapter 5: Which Facts Matter? Reasonable Consumers and Materiality
Chapter 6: Omissions and Disclosures
Chapter 7: Special Topics in Competitor Lawsuits
Chapter 8: Consumer Class Actions
Chapter 9: False Advertising Practice and Remedies
Chapter 10: Other Business Torts
Chapter 11: Copyrights
Chapter 12: Brand Protection and Usage
Chapter 13: Competitive Restrictions
Chapter 14: Featuring People in Ads
Chapter 15: Privacy
Chapter 16: Promotions
Chapter 17: The Advertising Industry Ecosystem–Intermediaries and Their Regulation
Chapter 18: Case Study: Food, Drugs, and Supplements
Chapter 19: Case Study: Organic and “Green” Claims
Chapter 20 (online only): Case Study: Regulation of Discriminatory Advertising (Mostly Housing)
Chapter 21 (online only): Case Study: Regulation of Political Advertising

What Changed from the Sixth to the Seventh Editions?

We didn’t make many major changes in this edition. Most minor changes are standard updates. Some hot areas include courts’ treatment of reasonable consumers, online discrimination in ad targeting, and Section 230’s application to scammy online ads.

If You Are Teaching (Or Want to Teach) Advertising Law

For reasons why you should consider teaching an advertising law course, see this post. In addition to a complimentary book copy, we can provide (1) access to the Georgetown Intellectual Property Teaching Resources database, with digitized props galore; and (2) our PowerPoint slide decks, lecture notes, and other materials. If you are creating a new course, we can provide feedback on your draft syllabus and course proposal. Email me or Eric! You can see his old syllabi and exams on his Advertising Law course page.

from Blogger http://tushnet.blogspot.com/2024/07/announcing-seventh-edition-of.html

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