HLR Symposium, Panel 2: Sonja R. West, Press Exceptionalism

Posted on February 17, 2014 by rtushnet

Right now reporters have no special protections against trespass, breach of duty of loyalty, having their newsrooms searched, etc.  Journalists who receive leaks can be treated as criminals under some circumstances. No special right of access to places/meetings: if we can’t open the door to everyone we don’t open the door at all.  A number of nonconstitutional avenues offer some legal protection for the press in some areas, but are they sufficient?  Press functions at pleasure of branches of gov’t it’s supposed to be checking.  Yesterday, Reporters w/out Borders ranked US as #46 out of 180 countries in press freedom.

Today, we can all share information widely in a timely fashion.  But there are still differences between the press and an army of individuals with internet connections. Proven track record of publication, established audiences, gathering information, checking the government: press brings unique expertise, resources, track record. Can no longer rely on proxies like medium; non press speakers have access to the same medium, and press uses the same tools as non-press to reach audiences. 

Objection: Privileged status for a few elite speakers? Tech makes it easier for all speakers to do things it takes to reach press status, and that can be done without broadcast license/wealth, so that would equalize rather than trigger these concerns.

What can we do to breathe independent life into the press clause? Accept that the press does deserve special protection; then attempt to figure out what it is.

Ambiguity isn’t the death knell in constitutional interpretation; we’ve had ambiguities and still given constitutional provisions meaning.  Speech clause’s robust protections make linedrawing less vital. Burden at this stage isn’t to answer every hypothetical; constitutional interpretation is case by case. 

Two primary sources of guidance: SCt’s unanimous 2012 decision in Hosanna Taber v. EEOC: whether parochial school teacher was a minister for purposes of the ministerial exception.  Not only did the Ct conclude that it could identify certain individuals/orgs as constitutional right holders fulfilling unique const’l functions, but it also had a dutyto do so to give full meaning to the text of the 1A, which gives special solicitude to the rights of religious organizations. There are strong parallels to the press.  Second, looks at statutory attempts to define the press.

Who are the press?  The press are speakers who perform the constitutional functions thereof.  Functional approach.  Ministers: leading prayer, performing religious services.  Functions of the press: various answers—SCt has talked about the press a lot, in dicta, but they’ve said much more than they’ve said about ministers.  Two unique functions: gathering and disseminating news for the public; checking gov’t and the powerful.

How to find the press?  Holistic approach, looking not only to whether actors are fulfilling these functions, and also to other factors, none of which are decisive but seem to be reliable proxies.  Recognition by others as the press (also used in Hosanna Taber: church held teacher out as a minister, a “called teacher” rather than “lay teacher”).   Background of training/education: third-party signalling.  Also suggests that courts look for regularity of publication and established audience; correlates uniquely to constitutional function of press. If press broadcasts and no one hears, are they really functioning as press? This distinguishes press from speech, where we also value autonomy and self-realization. Effective press function requires connecting with audience—ineffective in checking gov’t/powerful if it doesn’t reach audiences; also separates out sporadic commentator who occasionally performs press like functions. Also helps with accountability: while the press checks the gov’t, reputation and readership checks the press.  Without those demands, we lose controls on the journalistic enterprise.

Time and effort are required to be the press. This seems to bother people.  It goes against our instinct to be constitutionally overprotective.  That makes sense for speech, where we don’t want to exclude people/viewpoints. But all speakers would retain speech rights; press would be extra.  Relying on regularity/established readership helps avoid concerns about elitism: more people can reach a broad audience with the internet, even if you don’t have a printing press.  It’s not as important that everyone is the press as it is that everyone has a path to becoming the press.

RonNell A. Jones: Clever to look to religion for insights into meaning of “press,” once there is an institutional component to the 1A.  Hosanna Tabor is attractive but not perfectly apt.  Self-identification enables gaming of a constitutional right: serious problems with incentivizing everyone to self-identify.  Also doesn’t alleviate risks related to external recognition.  Relying on press organizations to identify the press necessarily favors old media; they control membership and educational trajectories. 

Hosanna Tabor: SCt didn’t actually decide what a religion was, but rather who qualifies as minister in what we assume to be a religion.  That might be more useful for who in a news organization is a reporter, but it doesn’t directly address the object of the guaranteed freedom.  If the standard is affiliation with a press organization, we have to figure out what a press organization is, and Hosanna Tabor doesn’t help that; courts have struggled to avoid defining what a religion is, and has put a lot of attention on sincere belief (whether those beliefs occupy a place in life of possessor similar to the place occupied by a belief in God for a more traditional religious person—functional).  Task-related functional question of what the alleged member of the press is doing, and how it parallels what the press at the time of the Founding did, might trump external or internal identification.

Unique pressure created by existence of two religion clauses tugging on each other. Structural element to Hosanna Tabor isn’t present in the press context. 

A heavily functional approach might make more sense in the press context than in the religion context. We don’t really know what we want churches to be doing, while we have a good idea of what we want the press to do (that checking function).

David Anderson: Lots of others gather news and check the powerful. Most of what the news reports is info gathered by others: police, prosecutors, defense lawyers, judicial proceedings.  More complex forms of wrongdoing is usually uncovered by gov’t regulators/investigators.  Fires, floods, natural disasters comes from officials, relief agencies, etc. Economic news: Labor Dep’t, stock exchanges, etc.  Scientists, economists, medical researchers, and other experts whose studies are reported on.  Fashion, spending habits: industry and trade groups, other gov’t statistics.  Press provides valuable perspective, and some of the information is generated because the press is there to report it.

Press also reports news uncovered by enterprising journalists. 

Press is rapidly abandoning scrutiny of gov’t: closing capitol bureaus. Watchdog role largely ceded to interest groups.  NRA/Sierra Club are more likely to serve as a check on public officials than the press.

Press as disseminator: no longer essential.

The press uniquely organizes dialogue: sifting the news; organize conversations among those who see the outlet as sufficiently worthwhile to subscribe/read.  This may seem elitist; they decide what to give the audience, constrained only by judgment/need to hold or expand audience. That’s how filters work: teachers decide what to teach, ministers decide what to preach.

Political parties can perform some of the same functions, as can interest groups. Maybe other mechanisms will evolve. But for now the press is the principal organizer.

Religious protection prevents government meddling in big areas of life; so too with press. We both want the press clause to do work, like protecting confidential sources and providing certain access. The stronger case for constitutional protection is as organizer of democratic dialogue; it’s not dependent on any belief that the press is unique, and insisting that it is unique risks rejection of that factual premise. It’s enough that the press is one entity that serves these functions and that it’s the one the Framers anointed.

West: reiterates that speech provides a backup in case we’re mistaken.  Organizing public dialogue is an important function, and there are others who perform similar functions. But would stick up more for reporters in the trenches—Chris Christie story came initially from local traffic reporters who kept asking questions. No gov’t agency or nonprofit was going to give us that.  Individuals do also gather and disseminate info and check the gov’t. Her argument is that the press is particularly more effective/important.

Corbin: what happens when the press is allied with the powerful?  Do you also consider integrity, accuracy, and independence?

West: Court did say that it wasn’t going to judge whether press was doing a good job; up to readers/reputation.

Anderson: there are a million outlets now; access is less an issue than it was in the age of Tornillo, but the question of abuse of the press is probably more acute because of lowered competition among actual newspapers. New outlets/ease of entry, he hopes, will address this.

Benkler: Imagine the judge at the Manning trial had excluded the journalists, but not the volunteer who tweeted the trial and provided lots of context and analysis.  Would that be a problem?  What about a documentarian who produces a film at sporadic intervals?  What about the kid who took photos of the pepper spraying at UC Davis—if he’s prosecuted for trespass, is he different from anyone who’s employed by a newspaper?

West: my definition of the press is functional. Employment by an institution is only one proxy. Tech has shown us that we have to think functionally for many of these examples. Many bloggers etc. will qualify. People who do it sporadically may not fall into this category, but the alternative is that no one gets the protections the press ought to have.

Chris Dale: The Founders’ press was almost fact-free; there weren’t fulltime professional news gatherers until the 1830s. Polemical, partisan, supplemented with poetry and letters etc.  Also there was a parallel kind of a press in the hit-and-run pamphlets of the era, almost always pseudonymous or anonymous.  DIY operation.  Crappy, but it was what they had.  Insights for our DIY age?

West: objectivity should never be a required part of the definition.  Modern analogy to pamphleteers is bloggers; some are fulfilling the functions of the press—others aren’t.  They’re still protected under the speech clause.  Probably wouldn’t even use the rights at issue here—it’s the repeat players who need the access etc.

Anderson: Printers did catalyze debates.  Community didn’t really exist until it had a newspaper of some kind.  First businesses in frontier communities: whorehouse, saloon, newspaper.  Felt need since the founding.

Marjorie Hein: why not consider “speech” oral versus “press” published? 

Anderson: history suggests otherwise.  All of the colonial/state constitutions protected freedom of press, only 2 freedom of speech.  Press was first, and speech came later.

Jones: Eugene Volokh has looked at technological definitions of press; Mike McConnell has done something similar after Citizens United.  West’s paper requires us to embrace the idea that the press clause isn’t a technological protection but rather an entity protection, and then to fill in that identity.
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HLR symposium on freedom of the press: Mark Tushnet & Susan Crawford

Posted on February 17, 2014 by rtushnet

Harvard Law Review Symposium 2014: Freedom of the Press

Introduction: Mark Tushnet, Reflections on the First Amendment and the Information Economy

Symposium papers provide an opportunity to speculate about 1A issues in modern information economy, which is different from the info economy in 1963.  His perspective comes from general constitutional theory, not 1A specifics.  Issues like federalism and state action doctrine do bear on 1A issues.  Also begins with realist/political perspective on structure of constitutional doctrine/scholarship. 

Interest group perspective: there’s something like agency capture; 1A scholarship differs from other constitutional scholarship in that scholars of the 1A seem to like the amendment, which isn’t necessarily true of scholars of the 2d or 4thAmendment.  Liking means something like, when the scholar hears that a law has been invalidated on 1A grounds, the presumption is that that’s correct by default; moderately strong reasons have to be offered why upholding a law is correct. Some 2d or 4th Amendment scholars think this too, but others think that the Constitution would be better without them; that changes the scholarship, including who gets attracted to doing work in the field. 4th Amendment: you get former prosecutors and defense attorneys; 1A selection is skewed, and press/media background attracts people to the field.  2d/4thare dichotomized: you can be pro-gun or anti, pro-privacy or pro-police.

1A scholarship is pluralist, but only on the side of regulation. Some advocates of consumer protection seek disclosures/restrictions on some commercial speech; some feminists seek regulation of sexually explicit material; they develop arguments why those are consistent with the 1A.  This ends up like agency capture: the pro-regulatory argument differs from area to area—different rights (e.g., equality) set against rights of expression; categorical or general balancing (as with consumer protection), while those arguments are met on the other side with unified arguments for free speech.  This is like agency capture in that the interest groups opposing, e.g., railroad interests are diverse; some proposed regulations will affect one group, but other groups will generally be indifferent, and the railroads are there all the time, opposing each regulation.  Each other group is there only sporadically. The RR develop expertise in making arguments the agency tends to accept, but the diverse groups on the other side won’t.  Roughly the same thing happens in 1A.  Advocates of expansive interpretations are there all the time, and advocates of particular regulations aren’t, while they might even oppose some other regulation—proponents of consumer protection might be nervous about regulation of sexual materials.  Content owners want narrow 1A in copyright, but broad with respect to the content they produce. 

Brings out 2 features of 1A scholarship/doctrine: newspapers and other info disseminators will systematically like 1A and comment favorably on pro-1A invalidations, except for campaign finance.  Looked at Snyder v. Phelps, Brown v. Entertainment Merchants, Alvarez, and commentary basically all said: the underlying behavior is bad, but the Court was right to find the regulation unconstitutional. Judges, like the rest of us, get a warm glow from praise, so press’s 1A liking induces judges to uphold 1A claims.

Like the railroads’ lawyers, proponents of the expansive 1A know the doctrinal territory, whereas proponents of particular restrictions don’t.  So they can point out how the argument for a specific regulation is inconsistent with other doctrines, which they then assert govern.  Proponents of regulation are relegated to arguing that their regulation is distinguishable.  So consumer protection advocates confront the argument that the SCt has rejected general balancing tests.  Equality advocates confront arguments about rights v. rights balancing.

1A scholarship is scholarship about the 1A; things could be otherwise. We could have scholarship about constitutional law, taking the 1A as its specific focus, as we did when 1A was simply one topic in a general con law course.  Interesting to note the time when publishers started to ask casebook authors to split out the 1A chapters for separate publication, and when law schools started to split the structure course and the rights course; that was a particular historical moment.  Treating 1A as a separate field means that scholarship overlooks generalized skepticism about judicial review, prevalent in many other areas of constitutional law, e.g. the Commerce Clause.  Also systematically undervalues gov’t interest in regulating speech.

Justifications for allowing courts to displace judgments made by accountable branches.  1A scholars take such as given and seek to develop reasons—autonomy, but they don’t grapple with difficulties of distinguishing between autonomy arguments for expression and autonomy arguments for Lochner. More often, nod in direction of Carolene Products, but don’t work out a representation theory in detail. Very hard to explain directly how Vermont legislature, in prohibiting data mining of prescription info, was attempting to close off the channels of political change. There are ways to get there, but it takes a lot of work and is implausible.

Tendency within 1A scholarship and doctrine to disregard the possibility of generalized skepticism.  Justice Breyer’s argument in Alvarez: a robust assertion of judge’s power to assess legislation in light of the Constitution independent of congressional judgment about constitutionality.  He thinks there are better ways of accomplishing what Congress wanted to accomplish, where better means accomplishing the goals to roughly the same degree without impairing the 1A to the same degree. Judge’s policy perspective on the best way to get something done.  Exemplifies rejection of skepticism of judicial review. You can find scholars who are skeptical of judicial review in almost every field but 1A; there’s him and Adrian Vermeule, and sometimes he’s not sure about Vermeule.

One reason may be that 1A scholars implicitly believe that some justifications for judicial review are unassailable for all 1A issues, but there’s still inattention to justifications for regulation.  Lingering impulse to say, though we know it’s not true, that words can never hurt you.  Regulation is the product of a democratic process. In Alvarez, Congress made a judgment about the most effective way of protecting the reputation attached to a military honor. In other domains, the very fact that Congress has made such a judgment would carry some weight. 1A scholarship would profit from more systematic engagement with general constitutional theory.

Panel 1: Susan Crawford, First Amendment Common Sense

The handful of companies that sell high speed internet access claim that because they own some of the physical facilities over which EM pulses carry data, and because much of that data is speech protected by the 1A, that they themselves enjoy a 1A right to edit what our experience of the internet is.  That they are just like the editorial board of the NYT. Thus Congress may make no law restricting their editorial freedom.  Even if they were editing to disadvantage competitors, or suppress speech w/which they didn’t agree, restraining that discretion would be presumptively constitutional.

Those transmitting others’ speech from point A to point B aren’t necessarily 1A actors. But if this argument is taken seriously by a single court, that’s the victory.  If they are, congressional power to carry out the democratic process will be severely undermined. Congressional authority to balance incommensurable interests, take social policies into account, will be subject to constant second guessing by courts assuming that what they’re dealing with is a 1A problem. But these issues of info transmission/communications standards have been left to Congress even in the Lochner era. This is a get out of jail free card for all regulated industries.  Indirect relationship to speech = back off because of doctrine of constitutional avoidance. Gives them the moral high ground, erases Chevron deference. This is Lochner for a fundamental input into every aspect of American economic life.

If one court accepts this argument, the lobbyists will use it as a hammer.  The idea that Congress had no authority over health care took on weight by repetition, and that’s the attempt here.

Her goal: nip that argument in the bud. Don’t take it seriously.  Need some moments of common sense.  Create a space for Congress to act where the speech interests are sufficiently remote, indirect.

Transmitters carry our speech from place to place, advertise themselves based on speed and cost.  No showing of monopoly power under existing case law is required for that function, common carriage, to be the providers’ role in American society. It’s FCC’s obligation to treat them that way if they play that role, which they do. Precisely because the consequences of according 1A protection to these few actors are so great, SCt has been careful to warn us against attempting to recharacterize decisions as speech regulation: FAIR from 2006, where CJ Roberts marches through arguments about requiring law schools to allow military recruiters campus access. Nothing inherently expressive about law schools’ role. Schools weren’t speaking, and FAIR applies squarely to network operators’ arguments.  Nothing inherently expressive about conveying others’ data packets from place to place; nothing understood as the message sent by the carrier. Providers admit their interests are purely economic (holding some packets hostage) but want it to be treated as speech.

What are the gov’t’s interest?  Network providers now have market power to start editing, because market for high speed access is now so concentrated. Cable has won wired marketplace; 80% of Americans have only one choice.  With TWC/Comcast merger, their market power becomes even stronger.  AT&T and Verizon have market power in wireless. Although their status today is general-purpose communications networks, they have the power to change the facts on the ground, start editing and be perceived as editors, and change the way some court views what they do.  They are seeking newspaper/Miami Heraldstatus, and now they have the market power to do it. Unless we nip this in the bud now, they’ll be hard to refute later.

Stuart Benjamin: Basically agree with everything.  His article.  Small disagreement: empirically, the Court hasn’t been hung up on terms like common carrier, and has looked at what alleged speakers actually do. This is how we got the result in Sorrell.  If tomorrow, Congress says that Upworthy and Reddit can’t prioritize their webpages, nothing will turn on characterization as common carrier.  If an entity is engaged in pure transmission of bits, it’s not a speaker whether we call it a common carrier or a banana.  If transmission is speech, then Ma Bell missed a powerful argument: the ability to not send calls made it a speaker. That would have been a failed argument and should be now.

Crawford also finds significance in the primarily (exclusively) economic motive of the carriers. He thinks that’s irrelevant.  Jeff Bezos might have wanted to make the most money and decided that the Washington Post was a better bet than an oil derrick, but that doesn’t change anything.  His reading of the cases is that in order to be “speech” under the 1A, you need a speaker seeking to transmit some substantive message and a listener who can recognize it, and mere transmission doesn’t qualify. Key case is Turner, in which all 9 Justices agree that cable operators are speakers because they engage in the editing function, not just choosing which programs to air, but choosing which channels to run over their wires.  But it wasn’t just transmission. SCt has never found a substantive communication that was sendable/receivable to be outside the 1A except for articulated exceptions.

Should give more significance to last few years’ decisions.  Sorrell, expanding the scope of the 1A; other cases in which the Court construes existing exceptions narrowly, such as US v. Stevens, Alvarez, Brown v. Ent’mt Merchants. Alvarez is particularly notable because the question was whether there was a 1A exception for false statements of fact generally, and the plurality said no, there are a series of narrow exceptions, all historically grounded (we aren’t making any more).

For a provider, if it is in fact engaged in substantive editing and is willing to tell users that, then they will be treated as speakers for 1A purposes. And that’s huge.  Heightened scrutiny for regulations of providers at least when engaged in that editing. 

FedEx transmits speech. No one thinks that FedEx is a speaker. But imagine that there were a DC delivery company that only delivered messages to/from Democrats, or Republicans.  That’s a speaker, communicating something more than transmission.

Everyone understood that cable companies chose what channels they chose to give, or the speaker announced that it was speaking. If Comcast decides to engage in substantive editing function, do they have to say that?  There’s a reasonable argument that a message that is never communicated is not speech for 1A purposes.  Imagine there’s a bulletin board that secretly deletes messages it doesn’t like, but never tells anyone about the editing—is that speech for 1A purposes? Reasonable to say that you have to be willing to tell the world to be covered.

Crawford: 50 years ago, lunch counters used 1A/rights of association as reason not to comply with antidiscrimination rules. No one took that seriously. There must be some area of action as gov’t not subject to 1A second guessing. Roads and communications networks are different/special, as interstate commerce, that deserves protection against the 1A. Thinks Turner “choosing programs” standard is silly too. When you’re selling transport, Congress should have power to say something about that. Gets difficult when same road sells pay TV and internet access.  SCt has deferred to idea that when you do both, we leave you alone.

Dawn Nunziato: Overly fearful about providers being treated as speakers? Why wouldn’t it survive Turnerscrutiny?

Crawford: this isn’t just about net neutrality, but about anything about economic terms under which they’re obligated to provide service.  Wants to make sure Congress has leeway to make policy about general purpose communications networks.

Benjamin: true, Turnerscrutiny isn’t that intense. But this is a big deal: FCC knew that if there was a 1A claim, different arguments had to be made, and marginal proposals might go by the wayside.

Q: Freedom from/freedom to?

Crawford: a few organizations shouldn’t dominate the speech of 300 million, but we need to frame the argument.

Q: what about an antitrust rule prohibiting carriers from providing content.

Crawford: that would be one rule. Nixon White House tried to separate content and conduit, but couldn’t figure out how to get it through Congress. But this 1A claim gets in Congress’s way, as does takings claims.

Benjamin: doesn’t think there would be a doctrinal/normative problem with that.

Caroline Mala Corbin: Chutzpah of corporations: Hobby Lobby, trying to use free exercise to get out of certain regulations.  Is there something leading to both of these?

Crawford: good lawyers look everywhere to help their clients. We’ve forgotten the larger democratic principles—because the communications networks are themselves tied up with speech, there’s a special role that feels different than Hobby Lobby.

Mark Tushnet: in both situations, the legislature has said something about the business model that you’re pursuing. Hobby Lobby: decide to use corporate form instead of partnership.  If your business model is violating the child labor laws, you can’t do it.  What about communication industries?  If your business model is making money out of insider trading, we know Congress can stop you from using that business model even though that involves speech.  Congress should be able to regulate communication industry business models.

Crawford: doesn’t want to limit it to antitrust—even in absence of market power.

Q: if we really believed in the Press Clause, we could solve many of these problems.

Yochai Benkler: Netflix—we can imagine advertising “you can get faster Netflix from us” pretty easily, and if that’s true Benjamin’s framework makes the cable company a 1A-protected speaker. That’s why Crawford’s argument is broader/more necessary.  Requiring separation of common carriage components from other components must itself be ok in the info industry—but then can you force a newspaper in a 1-paper town to carry new entrant on its delivery trucks?

Crawford: Court could make FCC nervous about any effort to reclassify, but it must act firmly now to inform what courts will do later. 

Benjamin: then every differential pricing model is protected by the 1A, and he can’t swallow that. Suppose Burger King says “we choose this supplier over another, and we charge some people more than others, and all these are part of our expression.” Not every decision to differentiate is a form of expression.  Turner’s argument: we are choosing these channels because we think they send a particular substantive message.  That’s different from saying we prefer Netflix to YouTube.

Benkler: but meat isn’t the same as House of Cards.  Turner rationale could be applied.

Benjamin: if you prefer a stream not because you like it better, but because it pays you more, that’s different.

Crawford: but that’s how cable channels get on.

Benjamin: one thing to say choosing USA Network because you like it; another to say it will be charged more/will pay more.

Tushnet: Burger King example misleads. Think of a real common carrier, a railroad, who says it won’t transport people to a right to life demonstration.  They can’t do that: they’re a common carrier.

Benjamin: if FedEx says it will charge more to some companies who send documents, fine, but that’s not expression.

Tushnet: it may be part of their expression, but as common carriers they don’t have an ex ante entitlement to discriminate.

Benjamin: but FedEx isn’t a common carrier. It still won’t be speech for them to charge more (or less) to big companies anyway.

Q: isn’t it overly optimistic to “nip this in the bud”? As long as they can develop greater market power and begin to exercise editorial functions, they can always bring a new case.

Crawford: true. Need correct administrative classification, and also rejection of 1A argument. Importance of 1A is to give people courage to do their jobs.

Jack Balkin: Suppose Congress passed §230(c)(2), excusing provider from liability for filtering/etc.  Wouldn’t that suggest that Congress has made a decision to treat this as 1A-protected activity?  Treats them as having editorial rights.  Congress is permitted to design structure ex ante; judicial review arises within that structure. But when Congress tries to have it both ways, it enables the argument you’re trying to fight.  (RT: I would think that as to common carriers/pure conduits for data flow like Comcast as internet provider, § 230 didn’t change/set the standard.)

Benjamin: highlights the importance of drawing the distinction between kinds of editing. Newspapers, when they choose to charge more for classified ads based on size, they might try to claim it’s all speech.  But we shouldn’t buy that with respect to price. Best argument for that is what DC Circuit has done for cable companies, allowing them to challenge limits on rates they could charge subscribers—DC Circuit said with no discussion that this implicates the 1A, which is a mistake.  Silly constitutional straightjacket.

Balkin: we think that Congress passes law and judiciary draws 1A lines, but Congress created the industry structure first, within which 1A review occurs, which is why reclassification would matter.

Crawford: trying to retain congressional role as decider.
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Neither EPA nor FTC preempt fuel economy consumer protection claim

Posted on February 13, 2014 by rtushnet

Gilles v. Ford Motor Co. — F.Supp.2d —-, 2014 WL 544990 (D.Colo. Feb. 12, 2014)

Gilles sued Ford for falsely advertising the gas mileage of his 2013 Ford Escape SE. The court denied a motion to dismiss on preemption grounds.

Gilles alleged that Ford’s website, Ford’s product sheet, the dealer’s website, and Ford’s web video series “Escape My Life!” said that the Escape got 22 miles per gallon in the city and 30 miles per gallon on the highway, but it did not indicate that these figures were EPA estimates. Relying at least in part on these mileage figures and other boasts about the vehicle’s fuel efficiency, he bought the Escape.  But instead, he got 25-26 mpg on the highway at 60 to 65 miles per hour in ideal conditions with no headwind.  He sued for violation of the Colorado Consumer Protection Act, negligent misrepresentation, and fraudulent misrepresentation.

The court determined that express and conflict preemption weren’t involved, so only field preemption would apply.  Ford based its argument on federal law requiring EPA fuel efficiency testing and stickers, posted on each vehicle.  By regulation, the EPA stickers must also advise that “Your actual mileages will vary depending on how you drive and maintain your vehicle” or “actual results will vary for many reasons, including driving conditions and how you drive and maintain your vehicle.”

Here, Gilles didn’t allege that his Escape wasn’t properly posted, nor that the dealer failed to make the EPA-written fuel economy booklet available to him (as also required).  Nor did he allege that Ford provided false or misleading fuel economy data to the EPA. Instead, his argument was that, despite this compliance, Ford simultaneously represented in its ads that the Escape got 30 mpg on the highway without mentioning that this number is an EPA estimate or that actual mileage will vary, and that this representation was false. 

The federal law and regulations didn’t purport to regulate ads, beyond the sticker and booklet requirements. Thus, the court found no EPA-based preemption.

Ford also argued that the FTC’s Guide Concerning Fuel Economy Advertising for New Automobiles preempted the claim.  The guide states that if a manufacturer or dealer makes an express or implied fuel economy representation, it must also clearly and conspicuously disclose “estimated city mpg” and/or “estimated highway mpg,” and that the EPA is the source of those numbers.  The FTC doesn’t require “actual results will vary.”

Again, no preemption.  Gilles alleged that Ford’s ads (1) failed to disclose that the advertised fuel economy standard was based on EPA data and (2) failed to include a disclaimer that actual results may vary.  If true, the first claim would be inconsistent with FTC regulations.  And the second didn’t create any conflict with federal regulation.  As for field preemption, “the idea that Congress meant to occupy the entire field of fuel economy standards is easier to swallow than the idea that it meant to occupy the field of advertising relating to fuel economy.”  Congress explicitly grounded the FTC’s regulatory authority on the EPA sticker/booklet, and the result wasn’t a “comprehensive scheme to regulate all advertising that touches on fuel economy.”  Given that advertising regulation is traditionally a state issue, the necessary clear intent of Congress to preempt state regulation was missing.

However, insofar as Gilles’ second claim (based on failure to say “actual results may vary”) would impose a different labeling requirement than the one required by the FTC regulations, it was preempted by the regulations.

The court also found the complaint plausible under Twiqbal and Rule 9(b).  “In a nutshell, Mr. Gilles suggests that Ford, by advertising the fuel economy of the Escape without disclosing such estimates as EPA estimates, was suggesting that the vehicle ‘actually achieves a specific fuel economy.’” His allegations that he viewed Ford ads that didn’t disclose the relevant information, including YouTube videos and a product sheet, and that salespeople made similar statements, combined with his allegation that his Escape achieved lower mileage than promised, met the plausibility threshold.

Ford argued that Gilles wasn’t specific enough.  Some statements upon which he claimed to have relied were made after he purchased the Escape, and though he pled that he visited Ford’s website “[p]rior to purchasing his Escape,” he didn’t say exactly when, how many times, which portions he viewed, or whether his viewing was connected to the purchase. Also, the website, at least in certain pages, does disclose that the mileage estimates were “EPA-estimated fuel economy.” Plus, Ford argued that Gilles failed to adequately plead an agency relationship between Ford and the dealership. These all went to matters outside the pleadings.

Gilles satisfied Rule 9(b) by pointing to specific statements that Ford made that he relied upon. More specific dates or physical locations where he saw the materials wouldn’t do anything more to put Ford on notice of the claims against it.  In fact, both parties attached certain ads to their filings, and there didn’t seem to be a real dispute about the ads Gilles claimed to have seen.

Nor would the court abstain under the primary jurisdiction doctrine.  The claim didn’t involve matters within an agency’s special competence. Though EPA has primary jurisdiction regarding the accuracy of EPA mileage estimates, this case wasn’t about their accuracy, but about failure to disclose. “These claims are closer to the garden variety fraud cases that are very much within the conventional experience of the courts.”

As a result of this analysis, the Colorado Consumer Protection Act’s exemption for compliance with federal law also didn’t apply.
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Trademark licensor must be joined even when plaintiff is exclusive licensee

Posted on February 13, 2014 by rtushnet

Aceto Corporation v. TherapeuticsMD, Inc., 953 F. Supp. 2d 1269 (S.D. Fla. 2013)

Aceto sells various pharmaceutical/nutritional ingredients and other chemicals.  Defendants allegedly make and sell a line of prenatal vitamins, Prena1, that violate Aceto’s exclusive US rights to a patented ingredient known as Quatrefolic and to the Quatrefolic mark.  Aceto entered into limited sublicensing agreements for Quatrefolic, including one with Pernix.  Pernix agreed to buy Quatrefolic exclusively from Aceto, and had the right to sublicense further provided that Aceto remained the direct supplier to the sublicensee (and retained other control over the sublicense).

Defendants wanted to become sublicensees, and were allegedly aware that Aceto had the right to review and approve all proposed sublicenses, and that Aceto was required to be the direct supplier of Quatrefolic.  Nonetheless, they allegedly obtained and sold Quatrefolic products from Pernix without a license, and used the mark to promote Prena1.  Their website says “Prena1 with Quatrefolic®” is “The ONLY Authorized Generics Prescription Prenatals with Quatrefolic® and life’s DHA™,” and contains an “unauthorized detailed description” of Quatrefolic.  (This seems like a first sale issue, even from the plaintiff’s own allegations, though “authorized” is a risky word to use.)

Defendants argued that Aceto failed to join required parties—Gnosis, the licensor, and Pernix.  The court agreed about Gnosis and disagreed about Pernix.  A licensee’s standing to sue depends on its rights under the license.  The court was in the dark about this because the licensing agreement wasn’t attached to the complaint. The complaint did allege exclusivity in the US, but didn’t allege that Gnosis assigned Aceto ownership rights or that Aceto owned all substantial rights in the US, as required for standing.  Under the Lanham Act, only the registrant of record has standing to sue under §32.  “No amount of judicial interpretation or manipulation of words can turn an exclusive licensee into an assignee. A trademark assignment and license are two quite different transactions with widely different impacts.” Likewise, as the Federal Circuit has held, “although a patentee has standing to sue in its own name, an exclusive licensee that does not have all substantial rights has standing to sue third parties only as a co-plaintiff with the patentee.”  Some cases suggest that an exclusive licensee can sue if it has the right even to exclude the licensor to the territory, but whether that was the case here was unclear; nor was there evidence or allegations that Gnosis delegated to Aceto the obligation to sue for trademark infringement. Plus, standing is related to but different from joinder: defendants were arguing that Gnosis needed to be joined, and the precedent supported that for exclusive patent licensees.  “Thus, unless Plaintiff is an exclusive licensee with all substantial rights in the trademark, all entities with an independent right to enforce the Quatrefolic Mark are indispensable or necessary parties to this infringement suit.”  Motion to dismiss for failure to join Gnosis granted, with leave to amend.  Gnosis could be made an involuntary plaintiff (or defendant), or Aceto could demonstrate that it was an assignee or the legal equivalent thereof.

Pernix, however, didn’t need to be joined, since it was just a sublicensee.  The court could determine the parties’ rights without Pernix’s participation; all that was necessary was reference to the Pernix-Aceto contract.  Aceto could get the complete relief it sought without it, and defendants hadn’t shown they were at risk of inconsistent obligations from Pernix.

This got rid of the §43(a) claims and federal and state dilution claims too.  (Federal dilution?  Ugh, where is Rule 11 when you need it?)

However, the claim for Florida common law unfair competition survived.  Aceto alleged false advertising and other deceptive conduct, and that the parties acted as competitors with respect to Prena1.  Plus, the court allowed a  claim for violation of the Florida Deceptive and Unfair Trade Practices Act to proceed. Though older case law indicated that only consumers could sue under FDUTPA, its old language allowing “a consumer who has suffered a loss as a result of a violation” to bring a claim was changed from “consumer” to “person” in 2001.  The statute’s stated purpose was “[t]o protect the consuming public and legitimate business enterprises from those who engage in unfair methods of competition, or unconscionable, deceptive, or unfair acts or practices in the conduct of any trade or commerce.”  The natural reading is that legitimate business enterprises are a class sought to be protected by the statute.

An unjust enrichment claim, pleaded in the alternative, also survived. The fact that Pernix was the one who directly conferred the benefit on defendants didn’t matter; benefits conferred through an intermediary can still amount to unjust enrichment.
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gay conversion therapy as false advertising

Posted on February 13, 2014 by rtushnet

Story via Salon.  As repugnant as I find these outfits, this might be a new frontier in identifying false/falsifiable claims.

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Australian reform commission recommends fair use

Posted on February 13, 2014 by rtushnet

Report here (pdf).  Discusses the three-step test, moral rights, and the superiority of fair use to revised fair dealing.  Of note: one reason to adopt fair use is that it provides greater protection for “musical compositions, new films, art works and fan fiction.”

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lawsuit against "humane environment" claims for chicken

Posted on February 13, 2014 by rtushnet

Suit accuses Kroger of deception in how chicken were raised.

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EFF Seeks Midlevel or Senior IP Attorney

Posted on February 11, 2014 by rtushnet

See the posting here.

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WIPIP: IP theory

Posted on February 9, 2014 by rtushnet

Session 4: IP Theory, Parlor B

Annemarie Bridy, Internet Payment Blockades

Wikileaks: State Department publicly accused Wikileaks of violating US law; payment systems were suspended—PayPal, Visa, Mastercard.  Wikileaks ran through cash reserves in less than a year and suspended publication.  Cost Wikileaks 95% of expected revenue stream. 

Targets of multilateral payment blockades show power of intermediaries—Assange evaded the US, but Wikileaks wasn’t so lucky, within reach of corporate actors eager to appease the US.  Online payment blockades as means of regulating illicit conduct: also copyright infringement/counterfeit goods.

Payment intermediaries, search engines and ad networks are second-degree intermediaries, without direct knowledge of or control over what sellers sell or users share, unlike lockers. Has insulated them from secondary liability under © and TM law—Perfect 10 v. Visa.  No direct connection to primary infringement, so no contributory infringement; no ability to control, so no vicarious infringement. Kozinski’s sharp dissent: payment is necessary or pirates won’t deliver booty.

UIGEA: gambling law established precedent for regulating online conduct through payment intermediaries.  COICA of 2010 died quietly, but SOPA died a noisier death; both had provisions requiring payment intermediaries to dump sites/ISPs to block sites dedicated to theft of US property.  Result: industry code of best practices, one for payment processors and one for rights owners.  Self-regulation under threat.  Dedicated to © infringement and sales of counterfeit goods.  Right owner requests investigation of website; triggers payment processor investigation; burden on website to show it’s an authorized seller/distributor; if no proof, processor demands C&D; if not, suspends or terminates payments to merchants by US account holders; merchant can seek “prompt review” but processor is path of appeal. Rightsholders agree to operate in good faith on accuracy/completeness; respond promptly to processors’ requests for more information; use standard form, “RogueBlock” portal; use standard codes for unauthorized downloads, streaming, distribution of circumvention devices, counterfeits; concurrent notification to all processors; baseline training on how to detect counterfeit/infringing goods.

Normative concerns: the usual ones in privately ordered enforcement: is there fair process? Are lawful speech and conduct adequately protected? Should we be concerned about lack of oversight and public accountability?  (No, no, yes.) Given these shortcomings, do they at least work?  (No, because Bitcoin.)

Q: Seems like the more these methods are used, the less they’ll work.  Unblockable methods will develop.  (Though not superefficient.)  If only used against Wikileaks, circumvention won’t develop. But lots of people want to gamble online, that incentivizes development of easy evasion. Economies of scale.

A: agrees.  Whack-a-mole.  Route around obstacles. Cryptocurrency is an example.

Q: would some of these mechanisms exist without gov’t pressure?

A: yes, but there’s a spectrum of governance, from command and control to self-regulation; interested in this form of hybrid, where the gov’t doesn’t direct an industry to adopt practices that will then become law, which is coregulation; at least there’s more transparency in that situation. With this coerced self-regulation, it has the effect of public law without any of the transparency/protection/accountability. Gov’t pressure makes it particularly nefarious, though it would be concerning anyway.

Sapna Kumar: gov’t surveillance and ISPs—the rise of ISPs that post statements that they haven’t been compromised, or noisily closing up shop. Why haven’t we seen those types of operators in the transaction space?

A: you see it in search, where Google discloses DMCA blocks. Maybe not here because it doesn’t affect users directly. We don’t know how many transactions are being blocked.

Andrew Gilden, Stanford Law School (fellow)

Raw Materials in Intellectual Property

Concept of raw materials in recent © and RoP cases, where courts increasingly find fair use/1A protection depending on whether D uses P’s likeness/work as “raw material” for future authorship. What does that actually mean?  Is this a useful means of drawing lines? Real problems.

Rhetoric is trying to capture a certain creative/artistic/expressive process working with materials at hand, but as a decisionmaking tool it inevitably introduces hierarchies and preconceptions about what’s legitimate and illegitimate.

Free culture speaks about creative works as raw material for cultural participation.  Lockean scholars warn of dangers of overpropertizing raw materials, interfering with others’ ability to benefit. Increasingly doing doctrinal work—Campbell, then Blanch v. Koons—Supreme Court didn’t quote Leval’s use of “raw materials,” but subsequent courts, esp. in 2d Circuit, did.  Cariou v. Prince.  Seltzer v. Green Day.  By contrast, cases like Morris v. Young, court finds not raw material because D’s use involves marginal artistic innovation for putting Sex Pistols image in red; likewise not in Morris v. Guetta.

In RoP cases, raw material rhetoric is even more pronounced.  Comedy III: raw material v. very sum and substance of the work in question. 

Winners seem to be big names; young/established artists seem to lose, or when they’re pulling from established artists like Salinger or Jerry Seinfeld—not considered raw material.

Thinks this inheres in the metaphor itself, which tries to get at individualistic artistic process. Raw is a relational concept that’s produced at the same time as “cooked.”  Higher, better state—as applied to human beings, raises serious questions, which also are raised here.

Maybe with innovation this makes more sense—iron ore is raw material for steel.  IP policy/free speech shouldn’t be making these distinctions.  We’re increasingly mandating this raw/cooked distinction, formalistic.  Winter RoP case says it’s straightforward, but it’s not, without background views on what constitutes legit art.

What to do?  Nip this in the bud. Speak about cultural resources, inspiration without importing concepts of good/bad art.

Jake Linford: doesn’t think raw material is about judging value of P’s work, but rather about going back to productive use/dissent in Sony.  Seems to be doing the same work. 

A: trying to get at productive use, but in the raw materials framework you need to be able to see these works in a raw v. cooked framework, you need to see the first work as raw materials.  Move away from intent to formal relationship, but raw/cooked doesn’t do that right.

McKenna: is your real complaint about transformativeness/evaluation of legitimacy of D’s work by asking what it’s done to existing work.  Raw materials is byproduct of transformativeness system. Does raw materials do something independent?

A: gets at real problem with transformativeness as principled way of deciding fair use.

RT: (1) Ironically perhaps, purpose transformativeness (Perfect 10, Google Books, iParadigms, etc.) doesn’t seem to have this problem!  (2) be explicit about race/gender!  Not accidental which depictions get deemed raw v. cooked, though not entirely determinative.  Can do an almost perfect sort on your examples, sorting them into P win/D win categories, based whether they depict a female or black body.

A: what does it mean to think about someone as raw, not a fully cooked human being—may eliminate some amount of empathy (a particular problem in RoP cases).  Even if it doesn’t matter in end result, it matters in rhetoric. On purpose transformativeness, may be protecting them for different reasons—innovation v. expression, with different problems of aesthetic judgment.

Ochoa: these cases do have result oriented problems.  Can we do better if we get rid of the raw materials label?

A: he thinks a change in perspective may help given that he doesn’t think courts are doing this intentionally.

Joe Miller, University of Georgia Law School

Error Costs & Functionality Exclusions

Different kinds of IP have different functionality exclusions.  Some have posited: Should be making them more like one another.

Should spend more on avoiding errors as cost of error grows.  What’s the error/the primary principle to be protected? Utility patent law supremacy: one and only one way in our economy to get a right against a use as a use in the world, regardless of independent creation. That’s utility patent, and it has certain screens and is time-limited.  Without it, that use is available to the public. The error to be feared: giving utility patent rights in disguise.  That can occur if (1) protection is on a par with, though not identical to, utility patent protection; and (2) that form of protection can be received without rigors and limits of utility patents—without utility, nonobviousness, time limit.

If that’s the error, can we look at functionality exclusions and see if we get more spending when cost gets bigger? Design patent = lowest cost, and is the functionality test with the lightest touch: if utility dictates design, design patent not available. Copyright is in the middle, more searching: useful article doctrine.  If utility materially influences the design, not ©-eligible, per Brandir.  Product design trade dress: the worst error by far, and has the most searching functionality test: if it affects performance/consumer demand for feature, not eligible for TM.  These are protections on a par with utility patent protection.

Error cost analysis helps us think more clearly about other parts of IP law, such as why there isn’t a functionality exclusion for trade secret? Because it’s not worth it, given the weakness of the right, per Kewanee Oil. Plant patents have no functionality exclusion, but again it’s not worth the cost; independent creation is a complete defense.  VHDPA: in © statute, but has design patent rule for functionality, because it’s more like a design patent (nonobviousness, novelty screens, short term).

Design patent is threat level 1; © is threat level 2, even though protection is not as close to par with utilitarian patent as design patent is.  In useful articles, © liability approaches utility patent liability.  TM is threat level 3: lasts forever, no novelty screen, acquired distinctiveness can easily be shown if successful, and confusion will also be easy to show with same product/same consumers.  Courts should not borrow, and should spend more on precaution when the error is the worst.

McKenna: threat level seriousness doesn’t mean they aren’t all threat level 3: they could all be level 3 with TM the worst. Doesn’t necessarily tell us how searching we want inquiry to be at any given level. Maybe design patent should be where TM is now and TM should be absolute.  If you differentiate and rank order, you need really strong sense that getting into one system kicks you out of the other. If you can use design patent to get secondary meaning, then get TM protection for that, you should have a hard edge on the channel into that path.

A: He’s just doing an ordinal ranking.  If the problem is a collapse of meaning, then disaggregating is an important step. Right level of each takes more work.

Separating these 3 types of exclusion makes design patent more attractive for someone in doubt about using TM/©.  Should lead to free for all after design patent expires.

Buccafusco: how do we account for false positives here?

A: easiest in trade dress.  If you’re excluding something as functional that isn’t, it creates consumer confusion, but happily in trade dress there are other source identifying mechanisms available to producers, such as word marks.  Copyright is harder—not as clear what person should do.

Rosenblatt: doesn’t speak to ease of getting protection—design patent is slow to get.  What do we tell people who don’t want to go through onerous exam procedure (ok, not onerous, but they think it is).

A: design patents shoot out of the office like greased pigs. If you can’t get one, you need to find another line of work.

Rosenblatt: but still, shouldn’t we be talking not just about not borrowing doctrines but also about optimizing examination doctrines?

A: yes, because it emphasizes that design patent can have the lightest touch.

Calboli: UK abandoned channeling (more than 50 copies of article applied industrially, you couldn’t have copyright); some common law countries still distinguish between registered design and copyright (you have to pick), though they don’t channel passing off. 

A: inspiration was a class in comparative IP. Second project: go back and look at EU.

Andres Sawicki, University of Miami School of Law

Risky IP

Risk takers are thought to benefit us all—Jack Kerouac, Wright Brothers—so why do we assume risk aversion in IP law?  Why should we care about artists’/innovators’ responses to risk? 

IP rights operate on the assumption that creative people will be rewarded, but you only find out later what the reward is—a risky reward mechanism. Could have prizes, grants, subsidies, salaries.  So we should understand how people respond to that.  Also want to know whether various limiting doctrines are too risky to work in practice: fair use, equivalents in patent law. Those arguments depend on an assumption that artists/innovators are risk averse.

What do we know about the creative personality?  Studies measure creative ability and other personality characteristics.  Message that comes through: people with high creativity tend to be more comfortable than general population in risky situations.  But the literature does struggle with defining creativity, and the measuring instruments are imprecise.  We see some correlations with risk taking on subscales of creativity, but some other subscales show an inverse relationship with risk taking/tolerance.

Economic literature: risk aversion comes from there. What do economists have to say? Evidence is mixed—the Innovation Lottery.

One issue: creativity isn’t the only determinant of the stuff we get.  Creativity is part of ability to invent, but so is persistence, hard work, cooperation, maybe empathy, intelligence.  Law might want to respond to all of those.

Most challenging part is definitional.  What is risk? There’s risk associated with a defined chance, uncertainty where the outcomes aren’t defined, then the creativity literature with a looser definition, then an economic/legal question.  Law may have more uncertainty (difficulty assigning probabilities) than risk.

Buccafusco: risks aren’t equal—gain isn’t loss. So how do you decide whether some behavior that might infringe but might make money is framed as a gain or a loss? Need to choose a decision rather than trying to characterize all decisions.  Also, it’s not just risk preferences, but risk perception—we tell people the odds of winning in our experiments, and they still think they’re going to win. They’re not risk seeking, they just think they’ll win.  (Could one characterize overconfidence as an underlying preference for risk, if the person has experience that should’ve disabused her of her overconfidence?)

A: framing is super important. Has to deal with prospect theory at some point.  Optimism bias is prevalent in highly creative people. One response: take advantage of that!  Another: feel bad for them!

Said: what about the intermediaries?

A: yes, our IP system is really designed for distributors, financiers, etc. One implication is: our system is nominally supposed to motivate creators. Insofar as their risk preferences diverge from those of their backers, and the system supports the financiers, that could be a problem.  You can’t conflate them.

Victoria Schwartz: are artistic risks correlated with financial risks?  Do we want artistic risks? Do we want to distinguish between successful creative people and unsuccessful ones, as we do in the corporate literature?

A: May find that people take artistic risks and not risks with their bank accounts—some of the creativity literature tests this.  People who chose financial risks were more creative (with small financial risk, anyway).  Risk preference might not be linear—optimal level of risk—some evidence for this too—creative people like 1/3 risk, which gives them sense of control, responsibility, agency.  Too much risk turns into roll of dice.

Q: often find that institutional actors are the most risk-averse, though they often face the least risk. Lemley on ignoring patents: Silicon Valley people who don’t care unless/until they get sued, treat it as cost of doing business.

A: that’s a big motive for his project—the cost of doing business people.
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WIPIP: copyright doctrine

Posted on February 8, 2014 by rtushnet

Session 3: Copyright Doctrine

Patrick Goold , UC Berkeley School of Law (fellow)

Is Liability for Copyright Infringement Strict?

Strict liability is conduct plus outcome.  Fault-based is conduct, outcome, and fault. Fault can be based on the standard of conduct (reasonableness), or the state of mind (intentionality, recklessness). Fault in the action or the actor. 

With copyright, the conduct is copying, the outcome is substantially similar work. Doesn’t require culpable mental awareness.  But is the result conditioned on the D failing to comply with a standard of conduct?  His answer: yes, that’s what fair use is for.

Under usual fault based torts, burden is on P to prove existence of each element, but in © only conduct and outcome must be proved and burden is on D to prove absence of fault.  That’s why he uses res ipsa loquitor: there are situations where the law presumes fault, and that’s what’s happening in ©.

Ochoa: Fault proves very sticky.  Products liability—courts use the concept of defect to reintroduce fault into the equation.  Can sue everyone in the chain of distribution, even people who weren’t responsible for the defect.  In ©, same thing: can sue everyone who reproduces/distributes an ad in a print magazine even if they weren’t responsible.

A: Relationship-based strict liability also exists, vicarious liability.  Similar issue.

In tort, whether conduct has an outcome has many variables—accidents can be caused by external factors. In copyright, relation between conduct and outcome seem to be entirely based on conduct. He’s thinking about ideas of fairness/reasonableness in negligence & their relation to this idea of strict determination.  (Seems to me a question of how you define “conduct,” at least in substantial similarity cases—if “conduct” at issue is “writing a play,” then many variables do seem to matter.)

Brad Greenberg, Kernochan Center for Law, Media and the Arts, Columbia Law School (fellow)

The Uneasy Case for Teachnology Neutrality: Copyright Future-Proofing and Other Myths

Idea of media neutrality—“fixed in any tangible medium of expression.”  Idea of future-proofing the statute.  (Hi, Aereo!)  Also to avoid disputes among incumbents and users—know what you have to pay for.  Also to avoid need to redo the law, as Congress had to do a bunch before 1976 Act.  DMCA was the major change after that, with smaller amendments; now trying again.

Paper is about why this failed.  Conferred broad rights, and courts responded with lots of carveouts, which undermined the basic goals of tech neutrality.  Applying rules/standards literature helps illuminate this.  Tech neutrality isn’t a standard.  It’s just a very inclusive rule, with anything new getting sucked in—overinclusiveness is a hallmark of a rule, not a standard.  Courts have responded with convergence, moving rules towards standards, losing certainty.

Problems: disrupts incentive system if you believe ex ante incentives are important.  Betamax, Perfect 10, Cablevision. Promotes inefficient risktaking for technologists, leaves copyright owners griping about stuff that was supposed to be covered.

Implications: if we want to future proof the statute, we actually need narrow rules to start and easier process to add more rules for certainty.

RT: incentives point only true if you believe incentive responses are finely calibrated.  I don’t think the empirics on that are solid.  Is Europe different/better?

A: hasn’t figured out best comparison—Canada is moving to tech neutrality. Perfect 10 is a perfect example: to keep Google from being liable, court crafted very broad transformativeness test. Tech specificity could have done much better.  But hasn’t figured out best way to handle this case if there were no rules to start with.  (Hmm.  Much better than what?  What have the negative consequences been?  Because I bet many of us would consider them positive consequences. That’s why I asked about Europe, which is now trying to figure out if it needs fair use to give flexibility.  We sure seem to be outperforming other systems that are also fighting about search engines.)

Lunney: Aereo?  Tech neutrality is fine, but it’s equivalent to 1000 antennae on 1000 homes, but also equivalent to a cable system—which is it?  Economically, if anyone could set up to compete with them, they should be more like antenna installers; if they’re a monopoly, more like cable.

A: Needs to work through that.  © statute doesn’t handle private use very well generally.

Q: what are you envisioning © would do instead of being tech neutral? Congress takes a while to act.

A: This is where an admin agency could help.  (RT: Joe Liu has an excellent article on this.)

Q: you say you want narrower rules and more rapid decisionmaking. How important is narrowness if you have administrators act quickly?  If presumptively everything is protected, but then an agency can allow it.

A: problem with broad rule is asymmetry in adversarial interests.  Challengers won’t have as much of an interest as incumbents.  Public choice!

Garcia: history of rules that are too specific—webcasting.  It’s not just the tech, the business model. Ad-supported streaming services: do they fit under the narrow statutory license?  Business model/consumer preference neutrality is the killer issue.

A: maybe he wants industry-specific rules.

Ochoa: admin agencies are notoriously subject to capture. Why any better than Congress?

A: Some of this is unavoidable.

Buccafusco: one-way ratchet is the problem.

A: that’s what fair use has been forced to do. Goal is to take some of the stress off of fair use.

RT: this is a point of pushback: some of us think fair use is not overstressed, and this fits into a bigger political conversation about whether other nations would benefit from fair use.

A: not interested in that here, but understands its place.

Said: might help to decouple normative and descriptive.  Feels as though you’re advocating before you worked out implications.  Free yourself to figure out your descriptive account, and explore tech neutrality pros and cons. 

D.R. Jones, The University of Memphis Cecil C. Humphreys School of Law

Law Firm Copying and Transformative Fair Use: An Examination of Different Purpose

Examines a group of cases with unlikely defendants—law firms.  Publishers sued for infringement. Two wins: both hinged on transformative fair use, focusing on defendants’ purpose.  There were no changes/alterations in works.  A number of similar cases: plagiarism software, Perfect 10, Google Books—purpose can be transformative.  These patent cases fit in.

Initially transformativeness wasn’t very clear, but a number of studies have identified patterns in what courts consider.  Purpose, regardless of change in substance of work, is dominant.

There still seems to be some confusion—is purpose part of transformativeness, or is it something separate?  “Creative metamorphosis.” 

Goals of copyright: furthering creativity, research, expansion of knowledge—see this in search engine cases, plagiarism, and also the patent cases. There’s almost a presumption of fair use when you use a copyrighted work as evidence.  Commentators, legislative history say this; very little analysis.  Why would that be so obvious?  Unless work is created to be used as evidence, it’s fair use.  Two “evidence” cases talk in more detail: use as evidence is different purpose.  Courts also say there’s a social interest in having all relevant information presented. Copyright must yield to the need for a complete evidentiary record; © can’t be used to undermine truth-seeking function. Something more important than ©. Societal benefit as a fundamental reason for fair use: supporting other values. You don’t necessarily need to create something new, as the evidentiary uses don’t.  Societal benefit can trump need to pay.  Even copies made for files/clients and not sent to the patent office were part of this important system, and thus also transformative. May not need to use transformativeness.

Lunney: maybe we’re using the term transformativeness too broadly. Is that a problem? Are cases coming out wrong?

A: maybe it’s semantic frustration.  Doesn’t think an outcome change is needed. But forces courts to say weird things when the underlying reasoning is solid.

RT: Societal benefit doesn’t answer the Q of whether the P should get paid.  My speculation: because factor four had become circular, courts turned to factor one to protect people creating new value when Ps were only making the Texaco argument that they’d like to be paid. In such cases, courts found transformative purpose dispositive.  This move was especially likely when the new uses depended on multiple inputs and a potentially significant orphan works or holdout problem (true in Perfect 10, also true in the patent cases).  Judicial proceeding/evidentiary use cases may be different from the patent cases in that the evidentiary uses are classic Wendy Gordon fair uses; the P is usually trying to protect something other than an economic interest.

A: it is clear there is no market or no effect on the market in evidentiary use cases. It’s really the fourth factor under all that.  But in patent cases the courts turn to public benefit as a reason to reject Texaco.  There has to be a social benefit that can outweigh even the Texaco argument that D can afford to pay licensing fees.

Loren: Semantics matter here.  Several different practitioners have lamented how awful transformativeness is in explaining fair use to clients—same term, lots of different uses.  To have new terms to support existing results could be useful in advising or explaining.  (RT: Or Fair Use Best Practices!)

Ochoa: problem is the history.  Productive use is much closer to what we’re talking about, but SCt shot that down, so it’s not surprising that courts won’t use that label.

Q: even you as member of the public might be confused and possibly deterred from making certain uses out of fear.  Once you extend this reasoning and try to use other terms, you could be addressing some sort of broader societal chill.  (RT: Or we could try Fair Use Best Practices!  OK, I admit, I have a strong bias here.)

Peter Yu, Drake University Law School

Can the Canadian UGC Exception Be Transplanted Abroad?

Hong Kong consultation on copyright reform.  Political parodies/using © work is common, and you can’t realistically call Beyonce for permission. 

Option 1: clarifying criminal provisions; Option 2: specific criminal exemption for parody; Option 3: fair use exemption for parody; Option 4: exemption for UGC.  He is advocating for option 4.  Some political uses aren’t parodies in the traditional sense. Hitler Downfallvideos can be made about what’s going on in Hong Kong.  Incidental uses, covers on YouTube. 

Transplant Canadian model without much change. Transplants have benefits and drawbacks.  DMCA is 16 years old—not a great candidate for transplant, known unintended consequences, product of specific US industry bargains.  UGC exemption: not based on industry bargains; HK and Canada face similar challenges.

Use must be solely noncommercial; source must be mentioned if reasonable to do so (moral rights respecting); individual must have had reasonable grounds to believe that the copy s/he used wasn’t infringing.  Finally, no substantial adverse effect, financial or otherwise, on copyright owner.

His only proposed change: remove “solely” because some internet platforms provide ad revenue.  His proposal: “predominantly,” so that would cover people with tiny amounts of ad revenue.

Industry reaction: fails the 3-step test/TRIPS, including TRIPS criminal enforcement provision; also that there’s not much case law on Canada’s exemption; complications on rights in underlying works; loophole for commercial pirates.

IFPI offered counterproposal for parody exemption (not satire, not UGC) when the parody satisfies 9 different conditions.

December, gov’t released discussion paper. Canada is the only country with a UGC exemption (which isn’t right if you also count transformative use).  Worried that might fail 3-step test.  Many experts agree that Canadian exemption doesn’t comply with the 3-step test.

If you’re really worried about that, can build in a 3-step test to the exemption, as Korea did.  Also, officials who say this don’t want to answer the Q whether US fair use violates the 3-step test.  If worried, have fair dealing for UGC.  Finally, we can have a reciprocal license—individuals can use the content, but allow the authors/© holders to use the new work for noncommercial purposes in return.  If concern is about “predominantly,” can redefine noncommercial to explain how to treat revenue that’s covered or not covered—more than trivial economic prejudice, a standard used in other elements of the criminal copyright law.  Final proposal: profit-sharing arrangement for commercial UCG, as done with Content ID.  Levy system also worth considering.

Could also consider a sunset period as licensing systems change.  “Licenses for Europe”—trying to develop microlicenses.  If those eventually develop, it will be easier to license, but those don’t exist now.  Finally, should be a moratorium on civil/criminal actions against users, as in AHRA in US.  “No action may be brought under this title…”  Break the interest into two; if the concern is really about intermediaries making money, then it would be much better to protect users from being sued while allowing actions against intermediaries/safe harbors for intermediaries. 

Q: what can we do?

A: Anyone at INTA should help explain what’s going on abroad.  Foreign professors can be very persuasive.

Q: proposal makes a lot of sense—what are the politics?  Do you need compromise/fallback?  YouTube could have a default rule that remixes aren’t monetized.  These platforms could set up distinctions.

A: fallback at this moment is fair dealing for parody and satire, broadly defined. But not as appealing as what you mentioned.  YT is playing both sides—negotiating with IFPI and pushing for reform.  Right now YT has master licenses; you’re proposing a noncommercial category, and YT isn’t willing to do that at a global level.  At the moment, if they can get a UGC exception, they might still want a master license to deal with commercial exploitation.

Q: (1) Noncommercial use is a difficult concept—people who hope to be ‘discovered’—noncommercial?  YT makes money from videos—how to draw the line?  (2) Reason to know the copy is infringing—isn’t that circular?  (3) Market impact is like factor 4 in fair use—how will it be defined? Isn’t that also circular?

Q: as practical matter, how do you test noncommerciality? Video can be on YT for years w/out making money, then make money, though that’s not usual.

Q: economic impact—really biting parody might harm the market, but we understand that’s not what the market harm factor is about in US. In HK, is that still true?

RT: Noncommercial isn’t difficult.  The fact that someone made money when you bought your computer doesn’t make what you write on it commercial—you didn’t make money from that.  The fact that you might someday have commercial success doesn’t make everything you do until that point commercial.  If either thing were true (third party profit or potential future money) then there would be no such thing as noncommercial use.  There is; we’ve lived with it for a while; it is perfectly manageable even if there are some cases at the boundaries, as there are for any definition.

A: noncommercial at the point of posting is his definition.  If you suddenly start making money, could reconsider.  (Points out that CC license users do have disagreements about boundary cases.)

Biggest problem is that users can’t compensate license holders enough for their demands/ad revenue isn’t enough even if YT is willing to allocate all the ad revenues to rightsholders.  Tushnet’s comments touch on whether third parties matter to rightsholders. Thus his proposal to cut the issues in half: moratorium on actions against users while allowing actions against intermediaries. But it’s true that third parties always benefit from fair dealing.
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