challenge to Sirius XM’s (huge) junk fees survives

Posted on February 8, 2024 by rtushnet

Carovillano v.
Sirius XM Radio Inc., 2024 WL 450040, No. 23 Civ. 4723 (PAE) (S.D.N.Y. Feb. 6,
2024)

Among other things,
this opinion features very effective use of images from this case and others!

Plaintiffs alleged
that Sirius XM promises its telephonic subscribers a particular monthly price,
only to charge them an undisclosed 21.4% fee (the “U.S. Royalty Fee”) on top,
in violation of NY GBL §§ 349 and 350 (along with breach of the implied
covenant of good faith and fair dealing and unjust enrichment). Sirius
responded that it clearly disclosed the fee and that no reasonable consumer
would be confused. The court declined to grant the motion to dismiss except as
to unjust enrichment (duplicative) and the request for injunctive relief (lack
of standing).

As alleged:

Sirius XM satellite radios are pre-installed in 84% of all new
automobiles, with each buyer automatically provided a free trial. These free
trials are critical to Sirius XM’s business model, which “relies on converting
these millions of vehicle buyers from free trial users into paid subscribers of
automatically renewing music plans.”

Once the car-buyer’s
free trial ends, Sirius offers a lot of plans, often at a promotional price
(for instance, “3 mos. for $1 then $23.99/mo.”). However, the advertised rates
don’t include the “U.S. Music Royalty Fee,” a flat-rate charge imposed at
Sirius XM’s sole discretion that has increased over time. Right now, it’s a
“uniform additional 21.4% charge.” So, a customer promised “3 mos. for $1”
will, in fact, pay $1.21 per month, and then $29.12 per month.) The Fee is a
key profit center for Sirius XM, responsible for $1.36 billion in revenue—122%
of Sirius XM’s net profits for the year.

The complaint
alleged that Sirius XM didn’t adequately disclose the Fee in its ads, such as
this one:

 

mailer

The promotional rate
is prominently displayed, but there’s no express reference to the Fee. At the
end of the mailer, the paragraph beginning “OFFER DETAILS” says “[f]ees and
taxes apply.” That paragraph also says in bold: “Please see our Customer
Agreement at http://www.siriusxm.com for complete terms.”

The customer
agreement then says, in relevant part “We may charge you one or more of the
following fees, all of which are subject to change without notice: … Packages
which include music channels may be charged a U.S. Music Royalty Fee. See www.siriusxm.com/usmusicroyalty.”
That page says “The
current U.S. Music Royalty Fee is 21.4% of the price of satellite plans* that
include music channels. … based on the entire subscription price of the plan
you purchase that includes musical performances.”

Like its mailers, Sirius
XM’s promotional materials also don’t expressly refer to the Fee. The email
shown in the complaint doesn’t mention fees at all; “See Offer Details”
(rendered in white text against a pink backdrop [ed. note: bad practice!]) is a
hyperlink that goes to a webpage that also doesn’t expressly
refer to the fee, though it does state that
“Fees & taxes apply,” and it directs customers to “our Customer Agreement,”
as quoted above.

email

webpage to which email links

For subscribers who
sign up by phone, the complaint alleges, Sirius XM never “disclose[s] …, at
any time before or when they signed up, that it [will] charge them a U.S. Music
Royalty Fee in addition to the advertised and promised price.” “At most, agents
may say the cost is the advertised or quoted price plus unspecified ‘fees and
taxes.’ ”

New subscribers
receive a confirmation email, which is allegedly the sole billing document that
mentions the Fee. Because Sirius XM does not send any “periodic billing notices
or invoices to its subscribers,” plaintiffs alleged that its subscribers often
learn of Sirius XM’s hidden fees by inspecting their bank or credit card
billing statement. Sirius XM customer-service agents are allegedly instructed
to tell those subscribers who do find out about the Fee “that the Fee is a
government-related fee and/or that [it] is outside of Sirius XM’s control.”

Whether an act is
“materially misleading” under New York law is an objective inquiry, and “generally
a question of fact not suited for resolution at the motion to dismiss stage.”
The court was not persuaded by Sirius XM’s (terrible) argument that it “fully
disclosed” the Fee. “New York courts have rejected the argument that a
generalized disclaimer as to ‘additional fees’ bars claims asserting the
non-disclosure of fees that a reasonable consumer would not expect” (collecting
cases).  Its “shorthand and inconspicuous
disclosure” that “fees and taxes apply” couldn’t suffice on a motion to
dismiss.

Some cases dismiss
claims where defendants gave plaintiffs the tools “necessary to understand” a
challenged fee, but those cases involved fees “so commonplace or small that the
reviewing court held that a reasonable consumer would not have been surprised
to first learn of them by reviewing the final receipt,” such as sales tax or
other government-imposed fees.

The court also
pointed to Second Circuit decisions addressing, in contract law, when a party
can be found to have been on inquiry notice of claimed terms during contract
formation. That court has found that reasonable consumers would not be on
notice of terms where the “small-print disclaimer” was “dwarfed by the
surrounding colorful text and imagery.”

E.g., the ad in Soliman
v. Subway Franchisee Advertising Fund Trust, Ltd., 999 F.3d 828 (2d Cir. 2021):
 

Subway ad

One reason the
Second Circuit found Subway’s disclaimer inconspicuous was its “mixed-media
incorporation of contractual terms” requiring a consumer to go from a print
advertisement to a website. “[W]hen a consumer must type in a
thirty-seven-character URL to their cellphone or computer, it is more difficult
to navigate to the terms of use in order to confirm” just what she has been
asked to agree to. Id

Nicosia v.
Amazon.com, Inc., 834 F.3d 220 (2d Cir. 2016), involved an order page like
this:

 

Amazon ad

Whether Amazon
provided sufficient notice, the Second Circuit held, could not be resolved as a
matter of law. The key “message itself—‘By placing your order, you agree to
Amazon.com’s … conditions of use’—is not bold, capitalized, or conspicuous in
light of the whole webpage.” The webpage’s many links, in “different colors,
fonts, and locations,” “generally obscure” the notification that Amazon’s terms
and conditions apply to the transaction. “Given the breadth of the range of
technological savvy of online purchasers,” the Circuit stated, “consumers
cannot be expected to ferret out hyperlinks to terms and conditions to which
they have no reason to suspect they will be bound.”

On the pleadings, it
was plausible that Sirius XM’s “mixed-media incorporation of contractual terms”
in its mailer—requiring a prospective customer to “type in” a “URL to their
cellphone or computer” and then navigate through at least three webpages to
determine the amount of the additional fee—“obscure[d] th[at] message” so as
not to give a reasonably prudent consumer notice of it, and that the disclaimer
about other “[f]ees & taxes” was “not bold, capitalized, or conspicuous in
light of the whole” mailer, and was “generally obscure[d]” by other
“distracting” elements such as the prominently touted sticker price of
“$5/month.” The “duty to read” terms properly “called to [a consumer’s]
attention” does not imply a “duty to ferret out contract provisions …
contained in inconspicuous hyperlinks.” And, under Mantikas v. Kellogg Co., 910
F.3d 633, 637 (2d Cir. 2018), a reasonable consumer is not “expected to look
beyond misleading representations” in one part of an advertisement “to discover
the truth … in small print” online.

It was also
plausible that, had they known of the Fee, plaintiffs “would not have been
willing to pay as much for their music plans” or “would not have purchased
music plans at all.” A price premium-like theory was plausible given the
allegations that, had Sirius XM revealed the all-in price of its subscriptions,
it would have faced downward price pressure from competitors, such as “Apple
Music, Spotify, Amazon Music, [and] Google Play Music,” all of which offer
similar music-streaming services but do not “charge any separate music royalty
fee.”

The claim for breach
of the implied covenant of good faith and fair dealing also survived, because
Sirius XM’s argument that the contract allowed it to charge the Fee “assumes a
disputed conclusion: that there is a binding enforceable contract between
Sirius XM and the plaintiffs that encompasses a customer obligation to pay the
U.S. Royalty Fee.”

 

from Blogger http://tushnet.blogspot.com/2024/02/challenge-to-sirius-xms-huge-junk-fees.html

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“recyclable” plausibly misleading where no recycling facilities accept the product

Posted on February 8, 2024 by rtushnet

Della v. Colgate-Palmolive Co., 2024 WL 457798, No.
23-cv-04086-JCS (N.D. Cal. Feb. 6, 2024)

Della’s consumer protection claims turn on allegedly false
labeling of toothpaste products as “recyclable” when, as alleged, recycling
facilities that actually accept the used tubes are basically unavailable.
Indeed, allegedly “there is not a single program that accepts toothpaste tubes
of any kind” in California or in the United States” “because of the processing
concerns that they pose.” Colgate argued that the tubes were made out of a type
of plastic that is widely accepted by recycling facilities and therefore, that
they are intrinsically capable of being recycled, which is also what a
reasonable consumer would expect. The court declined to dismiss the claims on
this ground.

The court distinguished Swartz v. Coca-Cola Co., 2022 WL
17881771 (N.D. Cal. Nov. 18, 2022), where reasonable consumers would not understand
“100% recyclable” to mean that no bottles would end up in landfills or
incinerators, which allegedly occurred due to a lack of recycling capacity and
a lack of demand for recycled plastic. That case did say that “a reasonable
consumer would understand that making an object recyclable is just the first
step in the process of converting waste into reusable material, and not a
guarantee that the process will be completed.” But the context was quite
different: the court there pointed to the FTC Green Guides allowing an
unqualified claim of recyclability may be made “if recycling facilities are
available to at least 60% ‘of consumers or communities where the item is sold.’
” Here, plaintiffs didn’t allege that Colgate’s claims were misleading because
consumers would understand them to “guarantee” that the tubes would actually be
recycled. Instead, they alleged that a reasonable consumer would not expect
that the tubes were not accepted for recycling by any existing recycling
program, and that they are intrinsically unsuited for recycling due to their
shape (indistinguishable from non-“recyclable” tubes) and the fact that they
can’t be fully emptied, thus contaminating a recycling system.

Colgate argued that this wasn’t its fault, but that’s not
the standard for misleadingness. Nor were Colgate’s “learn more” statements on
its packaging sufficient as disclaimers.

“[C]ourts are generally reluctant to charge a reasonable
consumer with the obligation of reviewing product websites or other written
product materials before purchasing the product.”

Although the court didn’t rely on the Green Guides in
assessing misleadingness, it disagreed with Colgate that they allowed its
representation. Under the Green Guides, “marketers can make unqualified
recyclable claims” only “[w]hen recycling facilities are available to a
substantial majority of consumers or communities where the item is sold.” They
add that “[i]f any component significantly limits the ability to recycle the
item, any recyclable claim would be deceptive. An item that is made from
recyclable material, but, because of its shape, size, or some other attribute,
is not accepted in recycling programs, should not be marketed as recyclable.”

California law allows the California Department of Resources
Recycling and Recovery to grant an exemption from the general standards that
govern what is considered “recyclable” under state law where materials are “trending
toward” meeting the requirements of recycling availability “through either
statewide recycling programs or alternative programs, such as take-back
systems, and for which the continued increase in the collection, sorting, and
viable responsible end market development the department determines will be
disrupted by a loss of a recyclable designation.” But Colgate hasn’t received
such an exemption.

Finally, plaintiffs had standing to seek injunctive relief
because they wanted to buy recyclable toothpaste tubes.

from Blogger http://tushnet.blogspot.com/2024/02/recyclable-plausibly-misleading-where.html

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Right of publicity question of the day, Taylor Swift edition

Posted on February 5, 2024 by rtushnet

Is this use of Swift-associated phrases transformative? And really, can you blame them?
Our Voting Era Merch never goes out of style email from Democrats (Texas's version)

Make the whole place shimmer in our Voting Era merch

Republicans like Trump and Cruz are gonna hate, hate, hate-- ... we know you're determined to shake them off at the ballot box

 

from Blogger http://tushnet.blogspot.com/2024/02/right-of-publicity-question-of-day.html

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Transformative work of the day, Omelas edition

Posted on February 5, 2024 by rtushnet

Isabel J. Kim, Why Don’t We Just Kill the Kid in the Omelas Hole. Warning: far more depressing, in my view, than the original.

from Blogger http://tushnet.blogspot.com/2024/02/transformative-work-of-day-omelas.html

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WIPIP session 7: Design Law

Posted on February 4, 2024 by rtushnet

Rachael Dickson,
Administrative Discrimination? At the Trademark Office

[I feel like there’s
a Panic! At the Disco joke to be made here.]

ID manual: a
searchable database of acceptable IDs of goods/services, regularly updated and
changed to adapt; you can make suggestions to add easily, and new IDs are added
regularly. Benefits: lower application filing fees: $350/class goes to $250
class; clarity and examples as to what IDs are acceptable. Potentially less
back & forth communication w/ PTO=cheaper prosecution, quicker access. “Accidental”
addition of medical marijuana IDs in 2010 led to rise in applications;
withdrawn.

Some options are broad:
medical services. Others highly specific: writing pens that may also be used to
perform pen spinning tricks, arranging beauty contests for animals, financial
evaluation of alpaca fiber. Dickson’s suggestions for “medical services in the
nature of providing abortions,” “consultation services in the field of sexual
health and wellness,” and “providing health information related to
contraception” were all refused as already covered by broader categories. But: Pedodontists,
nevus removal, psychological services for infants, medical clowning are all in there.

No class 44 IDs
contain contraceptive, birth control, condoms; sex or sexual only shows up in
class 44 in the manual for addiction treatment services. Class 44 IDs don’t
contain gay, lesbian, transgender, but prostitution services in the state of
Nevada are in there. Also no reference to cannabis, THC, or CBD. They instead
want a very complicated specification that ought to be in the manual.
Porn/adult film, sex therapy, and nudist resorts also missing. Sex toys don’t
seem to have been added until 2015.

Search codes for
images are very useful; many poop marks are applied for, but there is no poop
codes; since there’s no search code, you will have higher prosecution and
maintenance costs. No results for nudity, genitalia, or penis. They do have
nude. A lot are filed under other parts of body: genitalia are treated as
random other parts.

Applications
w/controversial content may get an “unofficial suspension”—application to
register swastika filed shortly after Tam, and wasn’t examined for over 2 years
and 2 months; 8 times longer than the average 2.7 months first action pendency
in 2017. Why was the obvious failure to function refusal delayed so long?
Applications for goods with uncertain legality also create TM problems—waits over
2 years w/o examination for goods containing delta-8 THC, whose federal
legality is questioned.

Applicants are
essentially left in limbo; they don’t really have any recourse (maybe a writ of
mandamus, but not clear it would work b/c there is no timeline except under the
Madrid Protocol).

Gilden: the patent
side has categories for, e.g., devices for genital massage. Why the difference
between patent & TM sides?

A: much easier to
get a more controversial good registered than a controversial service. TM
office may get in the news more; articles about “how dare they grant a patent
to this thing” don’t seem to appear.

Fromer: Wrote about
inconsistent application of immoral/scandalous applications—is this legacy from
having to police this, making them feel like they could be arbiters of prudery?

A: definitely could
be a factor.

Jordana Goodman: how
do they decide they need a new category? PTO did a lot of work on the patent
side. Is this just in the US and do they talk to other countries?

A: classes are set
internationally, but IDs can vary a lot b/t offices and US has stricter ID
requirements than others; WIPO database is missing a lot of these IDs. The ID
division can be very insular. Question is whether there is demand.

Calboli: every other
country still has the morality rules, so they won’t have these except within
the classes.

Christine Haight
Farley: connecting to Katyal’s paper: “Indian man” design code. That’s highly
offensive [A: but still in there!] but helpful to research. Why the whole pattern?

A: will be talking
to PTO historian; they ended up offering to refund fees to 2010 applicants if
they’d abandon them, so may never find out what happened there.

Rosenblatt: are
there things that are fine? You say discrimination—discrimination against
controversy might be different than other kinds.

A: they’re cowards—avoiding
controversy is the goal. There is a design code for marijuana leaves; you just
can’t get a cannabis ID.

Laura Heymann: There
expressive consequences and functional consequences here. What’s the meaning
and what effects does it have on competitors? Are they having trouble clearing
marks?

Christine Haight Farley,
Design Authenticity

Book project, still
shaping up. Case study of George Nelson’s bubble lamp (mid-century modern
design), how TM law creates new design rights. Nelson was second design
director of Herman Miller Co. Contested origin stories: lack of clarity about
who’s the designer; George Nelson had his own design firm while working as
design director. Lots of stories of derivative iterations of designs where
people were working together. Mazer v. Stein: a sculptural base can be © but
not a midcentury modern lamp; Sears v. Stiffel: invalidated patent on another midcentury
modern lamp. Attributed to Jens Risom, 1950s: a daybed can’t get a design
patent, would need to flip up and fry an egg. Even without IP protection, they
promote authenticity. Herman Miller makes catalogs like coffee-table books,
pushing the idea of the celebrity designer (even though they weren’t exclusive
to Herman Miller). Midcentury modern revives in the 1990s, so there are
reproductions (since there aren’t enough old pieces around). Modernica buys the
original molds etc. and starts selling them. Design w/in Reach had some “authorized”
works but also was making their own versions of furniture. Herman Miller starts
to fight back, saying that’s all fake. Certificate of authenticity; they mark
the hell out of chairs w/designer names, signatures. “You can copy a Rembrandt
and do a beautiful job but it’s not a Rembrandt.”

But this is smoke
and mirrors: they claim rights b/c it’s authentic and it’s authentic b/c they
claim rights. They’ve changed the design, but still claim authenticity: the
authenticity is the brand. Herman Miller brings claims of unfair competition,
false association, false advertising, right of publicity, TM rights including
dilution, claiming designer’s name, model names, and shape of the design. Claim
to have been authorized by designers and heirs—claiming to own history of
design, contra Dastar’s point about not searching for the source of the Nile
and all its tributaries. “Original reproductions” is the concept. They’re
machine-made goods.

Eric Johnson: have
they been successful in pushing others out of the market?

A: not always—Eames
sought utility patents for some designs, so the PTO then didn’t allow
registering the shape. Herman Miller was unsuccessful in one case but learned
from that. Suing all the time, more successfully. When they’re all
knockoffs, it’s a race to the bottom. Design w/in Reach was selling its copies
as “museum quality reproductions.” It’s now hard to sort through the market to
get a good one.

Lemley: larger problem of TM capturing the concept of
authenticity; separated from traditional goal of branding. Should separate the
law from the marketing.

A: most of these other designs went out of production;
Herman Miller never produced some of them. They don’t have good arguments for
being “authentic” except by claiming rights from the designer—lineage. They say
it’s authentic b/c we are authorized by designer/heirs. Authorized how? For what?
As if there were rights to pass to them. Their authenticity leans on rights—mutually
constitutive. Authenticity then has a different meaning than it did in 1950.
Rosenblatt: yes, this is a story about de-tethering of authenticity from
anything else. No ©, no TM—just a case study in a free-floating signifier. Also
true of the “Conan Doyle Estate Ltd.” A collection of distant relatives who
purchased some © from the trust to which they were willed. They have a claim to
authenticity in name and backtracking, but no authenticity. Authenticity seems
to matter to people even when there’s nothing tangible, like NFTs.

Q: are there patterns in authenticity judgments that differ across,
e.g., clothing and furniture?

Jeanne Fromer, An
Integrative Theory of Design & Utility Patents (with Chris Sprigman)

Many technologies
are design-sensitive: computers, shoes, cars, phones, game systems. Design
patent protection: the justification is a puzzle. Maybe historically it made
sense but doesn’t match up to what’s going on now. Share commonalities w/other
IP: encouraging people to create (design). Do we need that incentive? Many
other IP rights protect design—©, TM. Moral considerations? TM-type concern for
signifying source/distinctiveness? Beebe’s critique of sumptuary codes seems
relevant to that. Thinking about what design patent is or could be doing now.

Patent has two
buckets: utility for useful inventions, design for ornamental designs. The
oddness is that when we look at innovating design-sensitive technologies, we
see extensive, iterative interaction b/t industrial designers working with
mechanical and electrical engineers. Microsoft Surface designer: design is
king; industrial design defines the experience, and the form will follow the
experience. Defining experience gives constraints to the engineering team, so
the engineers have to find functional solutions. Similar for Xbox, but in
reverse: function is king, and designers have to come in and fit the best
design for the function provided. Ultimate goal is coherence. Surface is
subject to utility and design patents for the hinge on the back. Overlap in
inventors listed. Apple does the same thing—utility and design patents
overlapping w/same inventors listed. They understand what they’re doing as
highly integrated.

Design patents +
utility patents = optimal protection for fusion of design and function, obverse
to the conceptual framework that pervades the dichotomy of design and function
in patent law. By separating them out legally, you end up protecting the merger
of form and function. If you get both, you control the merger—they’re optimal
together. Still, design patent lawyers are often thinking in very TM-like
terms.

Implications: partial
claiming and fragmented designs might be a really bad thing if we care about
the fusion of form and function. We need better understandings of ornamentality/functionality.
Maybe we shouldn’t be so troubled by seeing both design and utility patents for
the same thing, but we do have to worry about two bites at the apple/staggered
bites at the apple. Might provide a justification for design patent if we get
it right.

If so we might
wonder about the role of design patents for things that aren’t for merging form
and function [designs on, not designs of?]

Q: subsequent
effects on claiming TM protection (using design patent to get secondary
meaning).

A: totally! We spend
so much time in legal doctrine trying to separate form and function and designers
spend so much time uniting them. Many of us are drawn to election doctrines to
avoid bootstrapping one protection to another.

from Blogger http://tushnet.blogspot.com/2024/02/wipip-session-7-design-law.html

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WIPIP session 6: IP Theory

Posted on February 3, 2024 by rtushnet

Andrew Gilden, Talking
Pleasure in IP

Courts and advocates
are skeptical of value of pleasure; when they want to honor it, they reframe it
as something else, like social justice. Joy of producing/consuming can be
important motivation for activities, though, so exploring how courts deal with
it in IP is important.

Expected to find a
lot of talking around the topic of pleasure, but surprised to find a lot of hostility
to, especially, defendants’ enjoyment of their own conduct.

Graham v. Prince: “Prince
testified his purpose was simply to ‘make art’ and ‘have fun’”—rejecting fair
use, repeatedly emphasized in opinion.

Axanar/Star Trek
case, defendants repeatedly talked about their fandom and how they wanted to
celebrate their love of Star Trek.

Harry Potter
Lexicon: “Perhaps b/c [D] is such a Harry Potter enthusiast, the Lexicon often
lacks restraint in using Rowling’s original expression”

Salinger v. Colting:
“60 Years’ plain purpose is… to satisfy Holden’s fans’ passion”:—trying to make
fans think differently is ok, but enjoyment is not.

D urges SAT readers
to satisfy their cravings

By contrast,
opposition to or detachment from the work helps: gritty retellings, where D “found
the world depicted in much popular culture baffling and alienating”; Carious: “Prince
doesn’t have any real interest in what another artist’s original intent is”; Elf
not on the Shelf sought to knock the Elf “off its perch.”

Plaintiffs who lose
are also described as fun-loving: loving Tolkien, loving Tiger King enough to
tattoo it, etc.

End product:
incentive to make up BS stories of why you’re creating and what your
relationship w/the work was: SAT claimed to be “critical,” Disney porn claims
to emphasize the transition of teenagers to childhood to manhood; VIP claims it’s
about reflecting on the role of dogs in our lives.

Scholarship says
that pleasure and joy aren’t accounted for in economic theories of IP, or
buried in welfare analysis, but he’s seeing more than that: hostility to joy. If
you admit to having fun (or are suspected of having fun) that weakens your
case. Intellectualize your motives, tap into your childhood trauma, find a critique,
focus on the pain. Rewards disingenuousness or overintellectualization.
Concerning that the winning human experience is dissent, critique, opposition
instead of joy. Gets the market failure explanation for protecting parody and
dissent, but the flipside is that joy and pleasure become commodities owned by
IP proprietors. E.g., members of frats and sororities “get so excited when they
pledge” and “want stuff” related to their new organization, or DC Comics v.
Towle, where “by Towle’s own admission, most of his customers were fans who ‘usually
know the entire history of the Batmobile.’” Intellectual pleasure is
commoditized or perhaps morally suspect (if unauthorized). Pay for your
pleasure or shut up about it.

Betsy Rosenblatt:
pleasure has been considered morally suspect a lot; combating that is a great
goal b/c there’s a justification in IP theory for why pleasure is a reasonable
constitutional goal. Giving pleasure can found patentability; use that! “Nobody
but a blockhead ever wrote except for money.” Argument for change to factor 4,
that growing a market/market benefits should matter.

Irene Calboli: Irina
Manta’s hedonic TM paper might be a useful contrast. Define pleasure for us—parody
can be pleasurable and is a big defense. Moralistic? Guns ‘R Us is ok, but
sexual expression is riskier. We protect some hedonism in TMs as status symbols
in letting people show off (pleasure in domination is more protected than fun
in equality?).

A: pleasure is a
positive subjective experience in response to a stimulus. Quite broad. Agree
that parody is fun, but it’s not really the profile it gets in the case law. A
parody is critical, oppositional, political. Wind Done Gone: Alice Randall was
a big fan, but also had a lot to say, and only part 2 of that mattered.

Andrew Ventimiglia:
signs of pleasure/aesthetic questions: are they reflected in opinions of judges
themselves? Religious freedom cases—judges seem to take joy in being amateur
theologians; do you see judges evidencing joy in aesthetic evaluations w/o
admitting they do so. See in © around religious texts, channeled texts (angelic
authorship)—judges are clearly having a good time b/c of the nature of the
dispute.

A: yes, Axanar tells
a lot of Star Trek jokes while it imposes liability on fans.

Sonia Katyal: what
are the functions of pleasure? Body of law around aesthetics of pleasure—©,
camp, [adult dancing]. Then there’s commodification of pleasure. Then there’s
the way that criminal law connects w/pleasure—what does the law do with the experience
of pleasure? S&M cases are fascinating in thinking about consent and
criminality.

Q: natural law tradition;
basic value of play. Play would seem to be fundamental, and should trump
derived rights.

Zahr Said: Sunder’s
From Goods to a Good Life—does seem like there are two levels of pleasure: the
fan’s level, pleasure in production, consumption, experience of community; the
other at the judge’s level, and could engage with affect theory—judicial opinions
systematically devalue not only women’s enjoyment, pleasure, and creativity,
but there’s also a real disdain for affect and anything that feels
pleasure-forward. Many of these judges come from English/social science
background and learned that critique was the right, masculine way of
approaching the world; being soft and affect-based was wrong.

Consider also jury
instructions: how do we talk to juries about this?

Terry (Taorui) Guan,
Collaborative Protection of IP: the Case of China

Proposed by central
gov’t, 2021, experimenting now. Objective to enhance IP protection; pressure
from US. Involves both gov’t and non-gov’t entities, including social
organizations and educational institutions. Idea: collaborative model offers
more effective IP protection, especially in countries like China where the
capabilities of courts and right holders are relatively limited.

Conventional approach
is court-centric, with relatively limited customs support, as in US.
Administrative remedies: injunction; civil compensation; some criminal
penalties. ITC will stop infringing goods at border. In Chnia, courts have
limited resources, knowledge, and capability, as do rights holders. High
procedural costs in time and money, insufficient remedies. So: facilitating collaboration
to share information and resources, using law and policy as the framework for
repeated collaboration, with gov’t entites playing a leading role: providing
guidance and instruction to private actors, social organizations, and
educational institutions.

Courts/admin
entities provide remedies to rights holder and information sharing between
courts and agencies to apply standards; courts also provide guidance through
issuing typical and guiding cases; agencies provide direct instructions to nongovernmental
entities. Individuals can join volunteer programs for IP holders and technical
experts like retired patent examiners can offer consulting to courts and
agencies. Operators—ecommerce platforms, wholesale markets, trade exhibitions—can
offer information, consulting to rights holders and introduce preventative
measures and private enforcement measures like scrutinizing products before
exhibit and removing infringing products promptly. Agencies can scrutinize
material to discover infringing products before put into use in public funded
construction projects.

Social organizations:
IP protection centers funded by gov’t can provide info to rights holders;
notaries/appraisal institutions; industry associations can serve members and establish
IP litigation funds for impecunious members.

Educational
institutions can provide courses/training to staff, provide info center in
libraries.

This model can be
more effective. Instead of a court-centric model, a pluralistic system can be
better at protecting intangible property by increasing accessibility,
diversity, and timeliness of remedies.

Challenges: interest
divergence: ecommerce platforms may not want to alienate merchants;
institutional costs.

For an incentive-based
regime, this gives us more levers to affect incentives by different kinds of
enforcement, adapt to geographic areas/innovator communities/commercialization
scenarios. China now has IP centers in industrial zones to enhance innovation
clusters. Adds complexity; adds cost for regulated entities.

Jeanne Fromer: say
more about specialized courts in China, as a way to provide more robust
enforcement. Fromer & Amy Adler wrote about
online shaming as enforcement—ambivalent, because it provides some benefits—cheaper,
quicker than traditional legal system, but lacks legal protections against
baseless claims or internalization of the costs of extending IP too far. Talk
more about costs of moving outside courts.

A: China is trying
hard to provide better judicial enforcement; collaborative protection is an
add-on. Only specialized courts in a few places. Judges in other areas may not
be as professional. Improving judiciary might not be sufficient.

Marketa Trimble: A
critic of the Chinese system might argue that this looks like making gov’t
influence or instruction more legally binding. An IP owner might not want to
enforce—does this mean that the gov’t can exert pressure on the business to
enforce even when it doesn’t want to do so?

A: the majority of
measures don’t compel enforcement, but administrative agencies may automatically
enforce rights if they receive reports.

Jeremy Sheff: any concerns
about compliance w/TRIPS and other international agreements in terms of role of
administrative agencies?

A: TRIPS requires
minimum standards, and China complied long ago. US complains: laws on books are
ok, but enforcement sucks. China now is trying hard to raise enforcement
levels.

Q: “collaborative”—is
it a public private partnership? In the US and Europe there is a strong collaborative
tradition in private systems—patent pools, cross-licensing, geographical
indications. Confidential terms, but educational institutions and collaboration
exist. What you’re adding is top down control. The role of the state is what’s
unique. Here we’d have a separation of powers problem. We have collaboration;
it’s the gov’t driven collaboration that seems distinctive. [We have a bunch of
that too—cf. jawboning; PTO and NTIA try to get people together to make deals.]

A: agreed.

[RT: Guiding cases
is really fascinating concept. How big a role do they play: do IP protection centers
instruct people who consult them on the guiding cases? Relationship to rules v.
standards? Rules may offer more comfort and confidence to nonlawyers. But rules
have well-known costs as well—consider how the balance differs when a court is
deciding between a rule and a standard and when a nonjudicial institution is deciding.
Even if the nonlegal institutions focus on rules, should the courts still be
using standards when a judicial dispute develops?]

Jyh-An Lee,
Non-Market Approach to IP

North/South debates
over things like one size fits all, access to medicine, commercial piracy. New
type of disagreement relevant to US-China trade. Market economy v. nonmarket economy
approach to IP: China’s trading partners, esp. US, argue that China’s state-led
IP practices and practices have distorted the market and harmed China’s trading
partners. Principal beneficiaries are Chinese companies moving up value chain
at expense of trading partners.

But what is this
nonmarket approach? Examples: policies facilitating illegitimate access to
foreign companies’ IP. Forced tech transfer, mandatory joint ventures, trade
secret divulgation in exchange for admin approval—non-IP policies lead to access
to IP. USTR has objected for years.

Another example: policies
prioritizing creation, acquisition and enforcement of IP by Chinese companies.
Antisuit injunctions: China’s different approach to standard-essential patents,
imposing injunctions globally, on all parallel cases. US was first to grant
anti-suit injunctions, but now China is with a different scope. Foreign right
holders are concerned that anti-suit injunctions favor domestic companies over
foreign patent holders. High level political/judicial authorities have cited
these as example of court “serving” the “overall work” of the CCP and the
Chinese state.

State-backed
acquisition of equity and tech: systematic 
investment in and acquisition of US companies by Chinese companies,
including by having Chinese banks provide financing.

Subsidies for patent
and TM filing, including subsidizing TM filings in US.

Social credit
system: expanding to IP. Could use them for schools, bank loans, and also as
punishment for willful patent infringement.

US has no idea how
to respond; this is no longer the decade old “this is a country of piracy!”
narrative. Treaty w/China; resort to WTO (US forced China to abolish discriminatory
licensing rules, but tariffs were struck down; pending dispute about anti suit
injunctions initiated by EU). Ally with trading partners; domestic legislation
w/r/t, e.g., TM applications. Effect so far is very limited.

Special 301 report:
not a theoretically robust critique so it’s easy for China to fight back. IP
itself is a government intervention. China is doing something different from
the past: following international IP rules, buying American IP, just as US
companies have done in the past. If you criticized Chinese patent filing and TM
registration, Chinese response was: you fund universities for innovation and
then they file for patents; what’s the difference? [See also: 1201 and 1202!]

Claim is that IP is
just part of the nonmarket economy. State capitalism: hybrid economy. Strong
national government for commercial success. Maybe TRIPS provisions on subsidies
can help navigate these tensions.

Q: in the US, we
treat IP liability as strict/not a moral question; China views it as immoral,
w/effect on social credit. Is there a bigger philosophical divide on what IP is
for?

A: still trying to
figure out own viewpoint. Social credit system is problematic, but in terms of
IP itself he’s not sure. A private credit score might also reflect adjudicated
liability for infringement. Internationally, the strategy creates costs on
trading partners: unfair. Domestically, you can see rent-seeking behavior,
e.g., subsidies for patent & TM filings that exceed cost of filing. $300 (approx.)
to file in China, but you can get $800 for that.

Trimble: is there a
public reaction?

A: favorable: gov’t
is promoting these things as good for citizens, self-determination, national pride.
Most criticism of social credit comes from overseas.

Rosenblatt: what
would happen if the US took these approaches? Thinks it would fail horribly,
but why?

A: also a puzzle.
Professors said market economies were always more efficient, but nowadays there
seems to be a debate.

RT: Zero interest
rates may have more to do with the US results over the past decade than our
innovation policy; likewise, if Chinese banks are forced to lend, then that may
be the key policy. It would be useful to know what happens if this can’t go on
forever.

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

Connecting philosophical
literature on vagueness to literature on claiming on IP. Vagueness is a
pervasive concern across IP mainly for reasons of notice. Patent law’s central
concept of claiming is about avoiding vagueness; doctrines of equivalence,
indefiniteness. ©’s claiming rules: especially subject to critique on notice
grounds. TM: registration as providing notice, but also the problem of
unregistered trade dress.

Sources of
vagueness: IP rights are categorical and composite. The property in IP is
invariably a category of possible things. Also, the category is composite:
membership is evaluated extensionally by reference to elements of the thing,
even where the category was initially defined centrally (patent) or by exemplar
(protectable features of © work).

Vagueness in at
least two ways: (1) what’s within the category and what is outside—what is the
boundary? (2) how does this determination depend on the elements used to define
the category?

(1)   is a qualitative vagueness familiar to
lawyers: vagueness that arises from natural language, e.g., no vehicles in the park.
We are skeptical about rules framed in language are capable of predicting their
application across all things. Structurally similar vagueness arises with non-word
symbols like images, see Tushnet.

(2)   Category membership evaluated by the
reference to elements is also vague in a quantitative way: soritical vagueness:
the Sorites Paradox—how many grains can you take away before there’s no heap?
Cf. The Ship of Theseus. Quantitative vagueness: at some point, elements present
or absent lead to something being within or without a category.

These two forms of
vagueness can interact. It’s possible that elements are themselves vague, as in
the question of what a patent claim or limitation covers. Are some elements
necessary and/or sufficient to establish category membership? Is the
necessity/sufficiency of any one element dependent on the presence/absence of
any other element? Examples: dueling “wine by style” store cases—if there’s
blond wood but no backlighting, is there a trade dress problem; if there’s
backlighting but black walls, same question.

Philosophical
responses: (1) epistemic humility, there’s a sharp boundary, but it’s unknowable.

(2)   Non-bivalence—there’s a range of cases
neither satisfying or failing the predicate—a tertium quid. But lawyers can’t
rely on either to decide cases.

Responses to
qualitative and quantitative vagueness differ. Qualitative: precisify: change
natural language (healthy level of X) to quantifiable technical meaning (Y PPM
of X).

Another possibility:
look at practices of the community and see what they do.

IP law allocates
authority to particular interpretive communities, and different forms of IP privilege
different interpretive communities: Patent, PHOSITA; copyright,
public/audience; TM, consumers.

PHOSITA:
all-elements rule seems to avoid quantitative vagueness, but qualitative is
still a problem.

Copyright (juries)—get
to decide w/essentially unlimited discretion on substantial similarity.

TM: actual consumers
and surveys as key evidence, perhaps w/judicial supervision of evidentiary
quality.

Normative
implication: vagueness will always be with us, so pay attention to who gets to
resolve it. Allocation of interpretive authority reveals the values, by IDing
the privileged communities, of an IP regime. Patent: a system for producers and
experts. ©: a democratic system, common-sense morality (jury). TM: solicitude
for consumer susceptible to expert psychological manipulation by marketers.

Lingering puzzle:
interpreters from outside the privileged interpretive community: we give the
final authority to people outside that community. Judge is in charge of claim
construction; bleeding of expert testimony on copying into substantial similarity;
judges and survey experts constructing imagined consumer in TM.

Fromer: in patent, there’s
often not good language to describe new things, which contributes to the
problem. In ©, there’s often resistance by artists to discuss what their work
is; they feel the work should speak for itself—the pathway of the law helps
find a way out but underscores vagueness. In TM, registration
and the two lenses of TM law—registration often stops mattering when you
get to court. McKenna and I wrote a bit about this in Claiming
Design. In Taco Cabana, court lets P get away with defining the trade dress
in the way that most helps it win—not the actual colors used, but “a vibrant
color scheme.” If consumers are to be sovereign, courts have to remember this
through every step of the game, and giving the consumer space means giving
consumer control over defining what the mark is.

A: note that © doesn’t
really care about the artist. [I would argue that this is true until you get to
the jury, where the artist comes to the fore—both Kat von D and Andrew Lloyd
Webber won cases that are good examples of this. The artist is part of what the
public, in the form of the jury, evaluates.]

Laura Heymann:
vagueness in the rule v. vagueness in application of rule. Jury gets told what
it can and can’t consider/do, which also affects whether they think their task
is vague.

A: yes, you can get
a judgment vacated if the instructions are bad, but you can’t get it vacated by
arguing they didn’t follow the instructions.

Boyden: there’s not
really an interpretive community for what counts as substantial similarity.

A: we could give the
question to expert artists in the field; giving it to the person on the street
indicates who we think the communities are. [Heymann says: but see VARA, work
of recognized stature]

from Blogger http://tushnet.blogspot.com/2024/02/wipip-session-6-ip-theory.html

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WIPIP session 5: Anti-Circumvention

Posted on February 3, 2024 by rtushnet

Charles Duan,
Property v. Property

1201 met connected
devices—computers are everywhere. Allowed producers to control coffee machines
by putting software in them; can prevent use, resale, using unsupported coffee.
Harms: speech, consumer protection (false advertising/disappointed
expectations), competition/antitrust, innovation/fair use, interoperability,
accessibility, security and privacy, environmental harms of unrepairable devices.

Project: frame these
as interferences with tangible property rights (don’t even have to get into
digital property claims). Interference with alienability/resale—Molly Van Houweling’s
work on interference
w/numerus clausus, creation of servitudes. Right to exclude: to prevent
others from entering onto our property—1201 interferes w/that, as w/the Sony
rootkit (or the Polish
trains). Usufructuary rights—use and benefit from property; interference
w/right to repair and w/right to use it with other stuff by preventing
interoperability. Right of possession: They can break devices remotely. Amazon went
into users’ Kindles and removed copies of Orwell’s 1984.

Why: Useful way of
organizing concerns and showing how they interfere with specific property
rights.

Takings?

Property v.
property: TM v. domain names; land v. chattels; IP v. consumer goods.

Cathy Gellis:
conflicts b/t two types of property validates propertizing IP, which she doesn’t
want to do.

A: there are disagreements.

Gellis: don’t
concede too much.

Eric Johnson: right
to possess seems difficult—removing 1984 from Kindle seems like interference
w/right to exclude. Not necessary to argument.

[RT: Takings might
be better reframed as trespass; Eric Goldman will hate this, but some courts
are willing to say that having these unwanted bits constitutes a trespass.  1201 is not a property right; it allows these
intrusions in defense of a putative property right—self-help? That is, the
state has both legalized a certain kind of self-help that would otherwise be
illegal and criminalized self-help on the physical property owner side that
would otherwise be legal. Maybe that’s a way to frame the takings issue?]

A: takings: Sony
rootkit is installed, and you’re not allowed to remove it because of the power
of the state; similar to Loretto v. Cablevision. [voluntariness seems like a
problem here]

Doing this without
privity means that even if it could all be done w/contract, 1201 goes beyond
what contract could have done.

Q: virtual goods—contracts
completely control and avoid the property questions, so you don’t even need
1201

[I think the Blizzard
litigation suggests that 1201 does provide an advantage, at least in remedies]

Boyden: It’s not an
accident that we have different intuitions about streaming DVD than controlling
your coffee maker—these are legally dubious interpretations of 1201 in the
first place.

A: Chamberlain highlights
that these are abuses, but you have conflicting precedent w/Blizzard and the
Copyright Office saying no, 1201 is absolutely supposed to cover these situations.
Highlights that Chamberlain and other cases are about personal property versus
1201’s use of copyright.

Pam Samuelson: don’t
forget 1202. You’re forbidden to remove/alter information at pain of
$2500/violation. Include some discussion about remedies, b/c 1201 and 1202
violations don’t depend on registration and no one focused on the remedies.

Cathy Gellis,
Jawboning in Plain Sight: The Unconstitutional Censorship Tolerated by the DMCA

Prior restraint
problem: mere accusation of infringing content online can cause censorship even
before any adjudication. The sanction is applied to the expression itself, and
in the wake of BMG v. Cox, the sanction is applied to the speaker, even in advance
of a finding of wrongfulness.

Safe harbors are
important. Prior restraint creates constitutional problems. “Jawboning”: a way for
gov’t to do end run about 1A by masking attempts to affect speech with
otherwise seemingly legitimate policy actions. Threats to split up FB unless it
moderates content in a certain way: tries to intimidate FB, a classic example
of jawboning.

Apply this to 512:
notice and takedown incorporates prior restraint; mandatory termination
provision; subpoena mechanism. 512(f) is an insufficient constraint. Cox case
is alarming b/c takedown notices were often so bogus that © claims got
dismissed, but they’re still held liable for ignoring bogus notices. It matters
b/c it’s censorship. Jawboning is often directed at specific content, more than
DMCA, but still procedurally prior restraint, and still makes all speech
vulnerable in a way that undermines free expression. Metastasizing of takedown
concept to other areas of disfavored speech.

Eric Goldman:
Jawboning might not be right analogy—think about gov’t instructions to private
speakers, but DMCA notices come from private individuals. The mechanisms are
analogous but the terminology might not be helpful. Question: if there was
strict liability for publishing infringing speech from a third party, then
would a safe harbor be a harm to speech? If it’s fair to have strict liability,
why isn’t it fair to have notice and takedown safe harbor? Or is the argument
that it’s an unconstitutional condition?

RT: Compare reasoning
in Disney case: if you actually retaliate for Disney’s speech, there’s no
claim. Jawboning as a concept may be too nakedly political to apply in any coherent
way. Bigger specific problem: Shelley v. Kraemer & NYT v. Sullivan—previously,
we saw courts unwilling to apply Shelley beyond restrictive racial covenants;
also unwilling to apply Sullivan beyond defamation. Is there anything but
Sullivan that makes private causes of action into state action? Courts don’t
think they’re violating the 1A—Schedule A defendant cases, same set of
problems.

Gibson: doesn’t
think Cox as a DMCA case at all—those weren’t really DMCA notices because
conduits don’t have takedown obligations; they were faux DMCA notices sent w/o
any of the few safeguards that exist under the DMCA. They’re making failure to
monitor repeat infringers into its own independent basis of liability—so it’s
not really a DMCA case, but a conflation of common law and DMCA theories of
liability.

Linford: are you
arguing in favor of a right to trespass on someone else’s property to speak?
Courts won’t want to hear that. Does a strong form of your proposal prevent YT
from agreeing to have Content ID, given that the backdrop is the DMCA [and also
a huge amount of pressure from lawmakers to expand Content ID, by threatening
to amend 512].

Tyler Ochoa:
Zacchini is an example of applying Sullivan principles to the ROP.

Bruce Boyden:
Privacy cases about the privacy torts also do so.

Blake Reid: © Infringement
and Noninfringement Doctrines are Lousy General Purpose Governance Regimes for
Solving Every Single Social Problem Involving Creative Works and Uses Thereof

Why does © show up
at so many socially important issues and take pride of place? Accessibility,
cybersecurity, physical property—making a hash of other areas. AI: © has taken
a dominant role despite a wide range of policy concerns. Adjudicating
noninfringement is procedurally unfair, and often results in wrong decisions
for copyright values, but the bigger problem is that © is fundamentally
unsuited to these tasks.

Governance seam
between fixation and use: at point of fixation a work is of no particular value
to anyone but author; for a work to flourish it needs to be experienced by
others, which requires copying, distribution, display, performance, etc. That
friction creates a governance seam suited to ©: regulatory benefit on
creator/assignee and regulation of downstream uses/users.

Copyright summons its
values, institutions and objects to the imagined regulatory scene. Mostly utilitarian
in the US. Institutions: courts, Copyright Office, Congress. Centers objects:
the work, the infringing/circumventing activity, the rights holder, the
infringer.

Even before an
action is instituted, © makes a powerful set of preliminary judgments: rightsholder
is the hero of the story/presumptive beneficiary of scheme. The work’s
existence benefits the public. The downstream user is presumptively an
infringer. Secondary assessments might lead to noninfringement, but
noncopyright values haven’t entered the story at all. Doctrines of
noninfringement are likewise going to give primacy to © values, and so the
threshold noninfringement defense is to appeal to © values like the
expressiveness of the accusing work. Must invoke limitation or exception on
copyright’s terms, only in the context of ©’s chosen institutions. In fair use,
3 of 4 factors center on the copyrighted work, while the first attends to the
use, but not to the policy implications of the use or the moral/political
status of the user. Instead, vibe check on legitimacy of use. To the extent it
considers noncopyright values, funneled through vague concept of transformativeness.

Specific limitations
and exceptions are no better, and hard fought over years through (captured)
regimes like WIPO or Copyright Office triennial review. At most user can get
use declared outside of copyright’s scope, which can be enough if all the user
wants is use w/o © liability.

But other regimes
might want more outcomes than that—they might seek to afford benefits to
creators beyond mere ability to structure transactions. They might have a
distinct value system w/radically different regulatory goals.

Inaccessible works: ©
asks is it ok for a third party to make the work accessible? Reluctantly said
yes, but accessibility law sees inaccessibility and the persistence of
inaccessible versions as a harm and a barrier to full participation. Might want
to compel creators to create accessible works in the first instance, rendering
remediation irrelevant.

Generative AI: a wide
range of other laws are relevant—transparency, labor law, antidiscrimination,
privacy and data protection. Largely absent from © noninfringement
determination. ©’s occupation of the governance scheme reinforces ©’s values
even when there’s a noninfringement finding that use/user are in ©’s periphery.
Frames wrong questions, diverts resources, yields results hostile to core
values of other regimes.

One set of fixes:
non© bodies of law shouldn’t concede the governance seam—creation and copying
of works that are likely to give rise to other policies. Need stable legal/policy
foundations in advocacy groups—disability law; budding law of repair. Those policy
agendas are necessary for researchers, remixers, librarians, fan authors.

BJ Ard: Why is it occupying
this seam? Access to knowledge mobilization as a response.

A: lots of reasons,
including constitutional foundation/mythology. We have a lot of interests that
haven’t developed stable law & policy communities or their own political
forces to rely on. © gets away with a lot b/c there’s no one there to push back
from outside of copyright’s institutions.

RT: Are privacy,
defamation also at the seam even though they are not applicable to many works?
Accessibility: always applicable. Repair: ??? A distinct set of works. Librarians/archivists/educators
as representing a broad social sector?

A: not arguing that ©
should never be at the seam, or noninfringement never part of the discussion.
Fanworks is a good example where fair use is important. But even there, thinks
about rights of access. Communities who show up at the triennial review care
about access to the work, even more than use in many cases. A
right of access might solve more problems than a right of circumvention.

Yes, privacy, defamation, and property are at the governance
seam. More than one body of law there at the seam. What happens when multiple
bodies of law are there? Unfamiliar territory that needs mapping. Maybe order
of operations is the issue: © should fight it out with defamation, property,
privacy and see what happens.

Van Houweling: Politics of this—© is something we have, and
Congress is something that doesn’t work. Where can one intervene? An
FCC-enforced right of access is not going to happen. What about state law?

A: even in tumultuous legislative times, we’ve had
accessibility laws and policies pass, even in Congress. Repair gives him some
heart. Right of repair started at Copyright Office but people realized that
wasn’t enough so legislation bloomed at the state level; White House and FTC
got interested.

Zahr Said: where there isn’t an express conflict, maybe you
cede ground too quickly. Think about revenge porn—Bambauer v. Tushnet debate,
what is the purpose of © policy? We might not know. Work on disability might
allow you to embrace disability rights as part of the purpose of ©!
Conceptualize it differently as not being outside. Reminds her of “law &”
debates: is economics outside law or better conceived of as within it?

A: happy to go where doors are open, but as someone working
on triennial review for a long time, the internal approach looks appealing and
has low barriers to entry, but over the long term it doesn’t deliver what you
want in full.

from Blogger http://tushnet.blogspot.com/2024/02/wipip-session-5-anti-circumvention.html

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WIPIP session 4: ™ & Consumers

Posted on February 3, 2024 by rtushnet

Mary Katherine Amerine,
Reasonably Careless Consumers in TM & False Advertising

How do courts treat
consumers in TM and false advertising cases? Assumption dates back to at least
the 1930s that consumers exercise less care for inexpensive grocery items and
are thus easier to confuse: Brew nuts v. Beer Nuts, Bulls’ Eye v. Raging Bull
for barbecue sauce, Powerbar v. Powerstick for sports energy bars, Huggies v.
Dougies for diapers. Even say that consumers can’t be expected to examine labels
carefully.

False advertising
uses v different framework: consider the challenged ad as a whole, including
disclaimers and qualifying language. Consumers are often expected to pick up
the product, look beyond the initial ambiguous statement, and inspect further.
Inconsistent with idea that consumers just toss things in their carts. Thus,
court said consumers wouldn’t be confused by “Trader Joe’s Manuka Honey 10+,
100% New Zealand Manuka Honey” because they would understand that it was
unlikely that the honey would be purely from bees visiting Manuka flowers; they
should know that Manuka honey is graded from 0-26 and 10+ is not great. Same
result with Ghirardelli “classic white chips” that don’t have any white chocolate.

This is
inconsistent! The consumer who scrutinizes “classic white chips” or googles Manuka
honey ratings will not be confusing Brew Nuts and Beer Nuts or Huggies and
Dougies.

In fact, consumers
are highly involved in grocery shopping; more care than TM cases give consumers
credit for.

RT: What would you
say to the argument that the different treatment is justified by the role of
consumer harm in the two causes of action? That is, TM infringement is a harm to
the TM owner; harm to consumers isn’t necessary so it doesn’t matter if they’re
tossing without thought; but if they don’t care enough to clarify ambiguities,
then there shouldn’t be a consumer claim. Doesn’t totally deal w/Lanham Act
43(a) claims, but it’s notable that your precedents on the false advertising
side are California consumer protection claims.

Jake Linford:
Perhaps the consequences for the defendant are different, so we expect
different behavior from consumers before applying those consequences. [Although
these are presumptions about how consumers will think, so we’re not just
expecting, we’re hypothesizing and holding as a matter of law.]

Eric Johnson: my
confusion is often intrabrand: which variety does my son want? No one is
confused about diapers; they’re very careful about which diaper. [I think of
Eminem’s classic line: “I can’t provide the right diaper.”] Courts love IP and
don’t like torts, which is contributing.

Q: Veuve Cliquot v.
Boutique Cliquot—Canadian case looks at casual consumer somewhat in a hurry.

A: What I’m taking
issue with is that assumption! Doesn’t map into realistic consumer behaviors.

Cathy Gellis: May
depend on what kind of consumer and what kind of product. People who bake know
what they want to cook with, but they might be in a rush and get the wrong one.
Is there a difference in the examples? Ingredients v. end products, or products
where the consumers will care which brand they got more or less.

A: this is the
problem of flattening all these things, especially in TM cases.

Betsy Rosenblatt:
Social justice implications. How much care should people be taking in
the grocery store? And can law make them do it? What makes people take more or
less care? Poverty might mean more care than less. (Poverty makes great
cognitive demands on people!) Who gets harmed by which standard?

Laura Heymann:
Warning labels. Tort context: courts make assumptions about how carefully
consumers will read warning labels that are also inconsistent.

Eric Goldman: Third
player, often ignored: the grocery store and what it does to create meaning
about presenting products, which can be inconsistent and exacerbate potential
problems. If chips are presented along with other chocolate chips, that could
encourage confusion.

Bita Amani: What’s
the endpoint? To change the standards in false advertising, in TM, or to create
a new cross-context standard? Consumers do spend more time scrutinizing labels—if
the empirics show one thing or another, how much should the normative reflect
the descriptive?

Felix Wu: on the TM
side, consumer sophistication is just one factor; on advertising, seems more
directly connected to an element of the claim itself. One way to harmonize might
be to make it more important/more directly connected to TM liability. Are
courts just mistaking the nature of the consumer or just ignoring it and using
other factors?

Laura Heymann

Thinking about how
consumers view their interactions with companies both as a matter of branding
and as a matter of contracts, specifically on social media. Move to “brand
persona” in marketing and law—not a producer but a collection of
characteristics and impression; the source is less important than the
authorization and the meaning. The new model: Dove put out a commercial about
real beautyàconsumer infers that Dove cares about women—using those personality
traits as a reason to engage or not engage with the brand in the future. Relational:
reinforcing and facilitating the relationship so the consumer has a good
experience and feels well treated, so won’t search for alternatives.

Consumer contract
part: consumers don’t read most consumer contracts, which are contracts of
adhesion. It’s often not rational to read the contract, since most terms won’t
end up mattering. Some companies use the contract language to reflect the brand
image and communicate brand persona, but even apart from that, it’s not the
contract or TOS that creates the relationship promise—it’s the brand. Brand
acts as umbrella unifying messages from different parts of company as if they
were talking as one—marketing, legal, billing. Casual speech feels more
friendly. We’ve seen this on Twitter, where people engage in dispute resolution
over social media as if they were resolving a dispute with an individual—they tweet
at the brand. Can lure people into thinking that the relationship is other than
transactional, blur understanding of who contracting partner actually is.
Different brands under helm of same producer can be surprising.

Felicia Caponigri:
what happens when a brand is attached to a founder?

Jeanne Fromer:
celebrity relationships/parasocial relationships seem both similar and also
different in key ways. Consider relevance for TM doctrine even though cases
aren’t brought by consumers. If it’s the case that people are interacting
w/businesses as if they’re people, that might provoke a lens of ways in which
consumers are likely to be confused or not [or what counts as acceptable
criticism, given the comparison to defamation].

Glynn Lunney: why
personalization matters? Most TMs that have value are from repeat purchases—Loehmann’s
brand loyalty [or my loyalty to Crest toothpaste] may or may not be
distinguishable w/o a humanoid relationship.

Eric Johnson:
consider lay dismissiveness towards contracts—it’s just legal stuff, legal
mumbo-jumbo.

A: research on what people
think makes a contract valid—not a meeting of minds, but a signature.

Betsy Rosenblatt: is
there some implied contract to conform to the personality you’ve projected? The
tendency to attribute blame to “the legal people” who aren’t really representative.
[If only the
tsar knew! There’s also resonance with the defense of overreaching C&D
letters—“we have to protect our trademark! The law made us threaten you, not
us!”]

Sari Mazzurco, Trademark
Law’s Consumer/Public Problem:

Tam & Brunetti
focused on the expressive qualities of TMs, and in VIP turned that around to
suppress speech. Lemley/Tushnet
discuss some possibilities. More foundational conflict: who TM law is for? And
why we should care! TM law is supposed to serve consumers as market
participants (reduce search costs) and protect competitors’ goodwill by
allowing them to associate exclusively as source of products. But TM is full of
protections that don’t serve consumers as market participants selecting among
alternative choices. They serve a different legal subject: the public. The public
has always been an intended beneficiary. Section 2 registration bars (public
morals, public order, dignity/personality interests); remedies (disgorgement
and injunctions both incorporate public interest considerations); cancellation
(actions can be brought by anyone who thinks they may be damaged, even if dignitary
interests of goats on a roof aren’t cognizable); dilution by tarnishment;
post-sale confusion; infringement defenses (nominative fair use and Rogers
invoke public interest in discourse, though positioned as a check on TM law
rather than internal to it).

How does this affect
application or development of TM law? Only prescriptive claim: TM should
endogenize the public interest. Doesn’t dictate case outcomes, but lays out
paths in front of court—consumer interests v. public interests. VIP looks to
consumer interests, Tam and Brunetti, look to public interest.

Practical benefits:
broadens potentially relevant public interests; helps articulate conflict in
ongoing disputes; guards against 1A challenges; specifies relevant arguments
in, e.g., domain name litigation, personal name litigation.

Rosenblatt: Already in injunctive relief?

A: when court says public interest is against consumer
confusion, but that’s consumer interest, not the public as a whole. Broadens
perspective.

Jeremy Sheff: If you’re trying to lay out the interests at
stake, producers also have strong interests. If we’re pretending that
consumer/producer interests are aligned, that’s clearly not the case; 2(a)
cases in particular, it’s producer interests that seem to win out over public
or consumer interests, rather than public v consumer.

RT: Another issue to
consider: lack of need to define trade dress in advance or in a way that is
clearly predictable by competitors; compare European registration regime Art.
4, which requires something that is clearly defined (“An EU trade mark may consist
of any signs, in particular words, including personal names, or designs,
letters, numerals, colours, the shape of goods or of the packaging of goods, or
sounds, provided that such signs are capable of:

a) Distinguishing
the goods or services of one undertaking from those of other undertaking; and

b) Being represented
on the register of European Union Trademarks, in a manner which enables the
competent authorities and the public to determine the clear and precise subject
matter afforded to its proprietor”). Difficult issue b/c public also has contending
interest: how can Brunetti and the scandalousness bar both serve the public
interests?

A: the public
interest shifts and evolves over time—the idea of gov’t protecting morals was
the idea of the day at one point; we don’t feel that way any more.

Lunney: do you mean
competitors or TM owners? Producers is a different group from either of those!
Using the public as a convenient fiction to identify and protect it without
acknowledging conflicts: post-sale confusion benefits the wealthy at the expense
of people who can’t afford the original. Not a monolithic group. Courts always
pretend it’s about potential consumers.

A: agree that the
public isn’t monolithic; courts are constructing an idea of the public.

Fromer: should explore
the interests of producers, in a way analogous to what’s been done in the ©
context: the romantic author is often held up to serve the corporate interests
behind them—it’s attractive but serves a different group. Is that going on
here? Who’s bringing the lawsuits, after all?

Felix Wu: More
convinced by some examples than others. Public = nonconsumers? Not sure that
post-confusion is an example; the competing groups are different classes of
consumers rather than nonconsumers. Dilution is also weird: the concept is that
brand consumers are going to be affected somehow. Biggest example is the speech
cases: expressive interests are indeed nonconsumer interests, as you see in
both registration and defenses. Then the Q is whether we’re just talking about
speech interests or is there some other set of nonconsumer, nonproducer
interests?

Linford: Do we care
about the majority of consumers? In genericity, we say that. Is the public a
placeholder for protecting new entrants over incumbents?

A: Concept from
environmental law article by Sagoff: how does concept of public lead you to
think differently about what we owe each other? Surveying involves a thick
concept of interaction with TMs that can’t just be a matter of individual
cognition. Meaning-making is social, so primary meaning is necessarily socially
constructed.

Chris Buccafusco:
Where do you see this entering at the various levels of abstraction/generality?
Sometimes you’re discussing litigation level v. basic contours of the doctrine.

A: higher level
argument goes to endogenizing the public in the contours of the doctrine; that
then has doctrinal payoffs for use in specific litigation contexts.

Matthew Sipe,
Trademarks as Competition Law:

TM as property—historically
accurate but less plausible/supported today. Search-cost reduction/quality
reputation incentive: descriptively accurate as matter of function, but only to
a point (monopoly would diminish search costs most)/still requires resort to other
principles. Promoting competition: common in modern case law, discourse, and
organization; but questionable provenance and not adequately defined or
specified. So what do we mean by promoting competition?

We’re still figuring
this out after 100 years of the Sherman Act. One vision: protecting producers’
investments and interests: Learned Hand, for its own sake and in spite of cost,
protect small units. We do that in TM to punish confusion even w/o demonstrable
harm to consumers; prohibit dilution; protect some aesthetic functionality; we
allow abuse of certification marks for cartelization.

Bork’s version:
consumer welfare, but smuggling in total welfare standard. In TM law: we allow
total cashout in final period, harming consumers; we effectively allow transfers
in gross (maybe justifiable as efficient but transfers wealth from consumers to
producers); we allow protection for rivalrous functionalities, like placebo
marks (again, transfers from consumers to producres); we allow price
discrimination (including same product under national brand and house brands,
which again capture from consumers/avoid deadweight loss). That can drift
towards a thin vision of consumer welfare. Fail to recognize source, origin,
and other nonconsumptive qualities as valuable—you can outsource production and
keep using the same brand; freely permit abandonment, rebranding, and
proliferation of different brands in same space all owned by the same company—obfuscating
market concentration.

Simultaneously
making key mistakes from every law]antitrust era b/c we haven’t thought about
what promotion competition really means.

Structural/institutional
lessons: find a common denominator of what we want. Consumer welfare might be
valuable, but more robust than pure price.

Enable consumer
participation and remedies: the consumer has an interest in TM but right now we
don’t have standing or remedies.  

TM law is more
afraid of false negatives than false positives, and it should balance them.

Move from
bright-line rules to flexible standards.

Eric Goldman: the
question is what should be exogenous and what we should import from other laws.
What should we import from antitrust or other areas into TM? What methodologies
should we use for gatekeeping? Maybe we need to rebuild antitrust law on its
own merits. Rules might be better than standards! You could be legal under TM
law but violating antitrust law.

A: at a minimum, TM
shouldn’t frustrate competition law.

Linford: we don’t
want consumers bringing their own TM actions, which is weird if TM is supposed
to be about consumers. But if you take seriously about how consumers think—1/3
of them are just irredeemably confused—maybe keeping them away from the law and
using others as a proxy to represent their interests is a good thing. Descriptively—are
there folks you need to respond to on bright line rules? Lisa Ramsey wants more
bright line rules, as does Bill McGeveran—lots of folks see standards as
problematic.

Jeanne Fromer: Daniel
Francis in antitrust is trying to chart a path between Bork and Kahn in common-law
principles, could be helpful analogue. Antitrust standing is completely the
opposite, w/consumers bringing suits—why is the decision different there?

RT: Consider false
advertising as another kind of competition law. Bright line rules—where are
they located in TM now? Glynn Lunney has a great paper
on this.

Lunney: we don’t
have antitrust nearly right, and it certainly isn’t helping the economy be
optimally competitive today. Hand quote maybe doesn’t mean what you think—it’s
anti monopolization (echoed by Wu).

Buccafusco: do this
one doctrine at a time, not all TM. Find the best thing in antitrust that is
most useful in TM and write that paper showing how it can help TM.

Wu: do you mean to
import a broader consumer welfare standard, or anti-monopolization, which would
mean fewer monopolies/cut against broad producer-friendly doctrines.

Heymann: another
benefit of picking a problem

from Blogger http://tushnet.blogspot.com/2024/02/wipip-session-4-consumers.html

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WIPIP session 3: Cultural Production

Posted on February 3, 2024 by rtushnet

Bita Amani:
Forbidden Arts & Subjugated Knowledges: On the Polemics of Intellectual Property

 IP rights are
state-dependent, property-dependent models so make false promises of equality.
History of art as propaganda: art can support war or speak truth to power. Iran
has criminalized expression: rapping, singing, dancing. IP rights are
contingent and state dependent in ways that have nothing to do with the merits
of expression or invention. State doesn’t just “incentivize”—it criminalizes
and tries to generate particular social outputs. Governing people to people
relations is a very different thing from state undermining personhood by
criminalizing dancing.

 Q: is this project
about taking away the mythos of IP as equalizer or something else?

A: has broader
implications, including for the concept of incentives. Possible implications
for how we think about refugees, internationalization of rights.

 Aman Gebru, Cultural
Appropriation as Passing Off

 Motivation started
with OMG Girlz case described as cultural appropriation: OMG Girlz (human
group) v. OMG Dollz that copied their looks. Initial reaction: of course there’s
no claim, as court concluded, but should there be? There’s no authoritative
definition of cultural appropriation, but overlap in definitions: power imbalances
between person using expression and source community (which might not even like
that identification), lack of understanding of user, offensiveness (which may
be based on decontextualization of meaningful symbol).

 Mostly this should
be handled through public opinion, public shaming. But should be a limited right
against commercial cultural appropriation. Mostly no, because of the benefits
of cosmopolitanism (Kwame Anthony Appiah): cultures always borrow; there is
nothing “authentic” about a culture and we shouldn’t want there to be, because
that creates stasis when dynamism is needed.

 Spectrum: diffused,
when multiple communities claim a symbol; targeted, when there’s only one. Also
a spectrum from noncommercial to commercial—a tattoo on one’s body versus
commercial use. He is suggesting a right against targeted commercial use. Justin
Timberlake’s cornrows shouldn’t be actionable. Turban = diffused. But Urban
Outfitters v. Navajo Nation would count as targeted commercial exploitation;
they used the term “Navajo” to identify the underwear they were selling.

 Current doctrines:
passing off/false representation/43(a); Indian Arts & Crafts Act. Mexican
legislation deals w/cultural appropriation. WIPO negotiations on traditional
cultural expressions.

Definitions are challenging, including use in commerce—but that hasn’t stopped
us in other IP.

 Marketa Trimble: is
Kokopelli diffuse or targeted b/c multiple tribes see meaning in it?—would communities
have to fight each other over what is theirs?

 A: exclusive
interest creation may not be natural to source communities, which is a risk.

 Jeremy Sheff:
Remedies—do you see the primary remedy here being injunctive or monetary, and
why? Also, some of these controversies seem more like reverse passing off than
passing off—introducing something to a majority community that doesn’t
recognize it and therefore thinks it’s the creation of the appropriator.

 A: Injunctive relief,
though at an early stage in thinking. Money isn’t at the top of minds of
communities.

 Sheff/Calboli: it
depends on the community!

 Jeanne Fromer: looking
at a snapshot of a moment of time doesn’t address how these symbols came to be
associated with a community, probably through diffusion. There are ways to justify
that but you should explain why you take this as a given.

 A: comes from using
an alien worldview for those communities—the legal system. If there’s targeted
appropriation in the present, we can redress it now.

 Q: 2016 Kenya law
has a detailed framework for protection, bulldozing through all these issues.
It’s on the books but never tested in courts.

 Q: what happens when
brands represent source communities? Gucci: maybe Gucci is reflecting Italian
culture with an archive of its own.

 A: maybe we would
say there wasn’t fraudulent intent.

 RT: Totally
understand why it seems like definitional challenges shouldn’t stop this if it
didn’t stop other IP rights, but still: The definitional challenges should have
stopped us, and two IP rights can make two wrongs.  As Jennifer Rothman has written, different IP
regimes define commercial use differently. You seem to consider fashion/selling
clothes to be commercial; why isn’t selling tattoos also commercial? Should
Timberlake’s hairdresser or the makers of the kente-themed scarves sold to
American politicians be liable?  (What if
Timberlake stars in an ad? What if he stars in an ad wearing cloth sold by a
person from the relevant community?)

 Irene Calboli: Americans
will be skeptical, so be thorough in definition of community/review previous debates.
What happens when Seminoles are divided on what should happen? Italian culture
is bastardized every day, but there are benefits—cultural goodwill.

 Rosenblatt: consider
dividing types—the secret and the sacred are useful concepts.

 Xiying Tang:
Deception might not come into it: the question is whether white guys should be
making these things, not whether people are confused about who’s making it.

 Deborah Halbert: The
Anarchist Cookbook v. Panther Press: Violence, Books, and Copyright

Originally published
1971: recipes for acid, bomb, booby trap. Left-wing publisher v. right-wing
publisher during the Vietnam Era. Alleged infringement of right-wing publisher’s
150 Questions for a Guerrilla, written by “the man who trained Castro.” 150
Questions seems to have copied from an Army manual itself; the Anarchist
Cookbook used redrawn versions and written narratives like recipes.  Defendants won after a day-long trial before a
judge, based on lack of substantial similarity in protected expression.

Panther (renamed Paladin)
continues to publish, including the book Hit Man that was the subject of a
lawsuit in the 4th Circuit. Publisher came to deeply regret
publishing the Anarchist Cookbook.

 Angela Riley, Sonia Katyal,
Rachel Lim, Indigenous Misdescription:

Dilution/erasure of
tribes. Here, facilitated by TM law.

Trademarks and indigeneity:
three ironies. (1) registration—tribal names as such cannot be registered by
tribal entities or anyone else because of 2(b)’s prohibition on registering
insignia—though recognized tribes are neither foreign nations, States, nor
municipalities, 2(b) still applies. But literally anyone, including the tribe
itself, can register as a mark if it functions as a mark.

This leads to
another irony of misappropriation, producing the phenomenon of indigenous
misdescription. Tribal names are registered as commodities.

 Purpose of study:
how many names of tribes correspond to registrations not owned by tribes. Also
explore indigenous branding from cultural property perspective. TM’s background
principles, e.g., secondary meaning, perpetuate inequality of ownership.

 Dataset: 9025
registered and pending marks 1891-2022 compared to names of 574 federally
recognized American Indian tribes and Alaska Native Villages. Only about 8% are
owned by tribes; dominated by nontribal entities.

 Three types of
misdescription: misappropriation; misdisparagement; misdesignation.

Misappropriation:
using tribe name to brand product/service: Boeing Apache Helicopter, Chippewa
Boots, Jeep Grand Cherokee—can exclude the tribe itself from the Register.
Misdesignation: brand based on secondary association—pima cotton named after
Pima tribe; lots of brands use “pima” to brand themselves, Wyandotte chicken
breed, Mohawk hairstyle.  Misdisparagement:
anti-indigenous slur/stereotype used as branding (Eskimo pies, Iroquois Indian
Head, Shawnee Baker’s Pipe of Peace)—most susceptible to public shaming.

 Focused on brands,
but other part of the study looks at real property—naming of cities and states
and their relations to tribal entities.

 Given the 8%
statistic, we wanted to reconsider the limits on the Indian Arts & Crafts
Act, which doesn’t extend to all products/services but does recognize this as a
problem. PTO has tribal insignia database but only for insignia, not extending
to actual words. Also: the limits of doctrines of misdescriptiveness and
deception (fixated on moment in time); don’t provide protection for tribes
because they don’t seem to link to the tribe because there are secondary
meaning rules that prefer “brand” over history of name. Effects on lexicon of
tribal names!

Failure to function
as a potential opening to ask how TMs are operating in the marketplace. Enabling
more registration for tribes? Policing the use of TMs that might be associated
with them? Output: a law review article and toolkit for tribes.

 Jeremy Sheff:
registrants who were entities created by tribes v. tribal members? One story
that often comes up is conflicts b/t groups and members of the group. What is
the historical arc? How many have been cancelled for nonuse/failure to renew?

 A: we limited our
comparison to tribal entities—it might be that members own some of them. Very
hard to adjudicate. History: based on the data, many are dead. Still
interesting to see the kinds of images that were popular at certain points. 1930s-1040s,
1970s popularity.

 Rachel Dixon: TESS issues:
missing dead marks.

 Jeanne Fromer: “lands
and brands” is a great concept. Never reflected on this rule—speak on
justification for ban on insignia? There’s a difference b/t saying no one can
own it and saying that an entity can’t own it. Why isn’t it being enforced?

A: need more research on treatment of tribes as dependent domestic entities.

 RT: say more about
why you concluded that 2(b) bars registering names of tribes? If it’s 2(b), it’s
absolute, even as against the tribe and even for governmental functions. So
wouldn’t you want 2(b) expanded as to nontribal entities? [Someone else, sorry I can’t remember who, gave a better framing: you could consider the model of 2(c), assuming Elster comes out as we expect.] Separately: Secondary meaning as conquest in
the M’intosh v. Johnson case? 

A: secondary meaning
as a prism for all these kinds of things is part of the study.

from Blogger http://tushnet.blogspot.com/2024/02/wipip-session-3-cultural-production.html

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WIPIP session 2: ™ Doctrine, © Fair Use

Posted on February 2, 2024 by rtushnet

Barbara Lauriat,
Borrowing Goodwill

Comparative/historical
approach to doctrine/theory. There used to be a big difference between having a
TM and passing off. Bone/McKenna’s history of goodwill: didn’t reflect her
understanding of the history: seen goodwill used as a property right protected
through the tort of passing off. Probably not “property” in the contemporary
understanding if you go back far enough.


UK: TM
protection depends on formalities/registration; registered TMs are property
rights; goodwill in a business is a different property right protected through
the tort of passing off; no generalized unfair competition law.


US: TM is use
based even in the absence of registration; US courts identify goodwill as the
property right protected by common law TM doctrines; generalized unfair
competition protection (limited by confusion?). Increasing blurring between
registered and unregistered rights.


1903 statement
in treatise: in England, TM is practically synonymous with “registered TM.” After
1879, there’s really no
such thing as “Anglo-American” TM law because they are too
different.

SCOTUS’s
decision to ID protection of goodwill as the foundational justification for TM
and unfair competition maintains TM owner’s actions and interests at the center
of legal analysis.


Traditional
narratives about goodwill are flawed b/c they don’t go back before the 19th
century. They claim that’s when goodwill arrived as a concept. Bone says it was
familiar from law of partnership from at least the early 19th
century, but what was that concept that was incorporated into TM doctrine?

Goodwill has a
very long history as an intangible, proprietor-focused, use-based asset
independent of TMs and related doctrines. Not trying to view it from modern
lens but what they did at the time with the concept.


OED:
goodwill—the privilege, granted by the seller of a business to the purchaser,
of trading as the successor. From 1500s. 1725: Daniel Defoe discusses how a
widow gets money for the “good-will” of the shop if she didn’t want to carry on
the trade. French in 1700s: good-will = custom or trade, habitual buying of
goods from the same vendor. Lots of ads mention it.


In takings,
goodwill was taken into account separate from the value of the land, e.g. 1802
law. Many cases in the 18th century use the term in non-TM cases as
property.


Hanover Star v.
Metcalf cited passing off cases from UK even though that was already a
distinctly different doctrine from registered TM protection, by 1916.


Jake Linford:
What is the payoff?


A: It’s hard to
say. Likes Tushnet on problems distinguishing registered
TMs from unregistered;
passing off is more restrictive than unfair competition. Irony: by resisting in
TM cases & Hanover Star calling TM property, you ended up with much more
expansive rights.


Betsy
Rosenblatt: Taxonomy of confusion—source v. sponsorship or approval. One could
argue that passing off is about confusion as to source and the other goodwill
stuff is about confusion as to sponsorship or approval, but maybe that is not
the way to go; does that fit into the history?


A: nomenclature
issue: “US TM goodwill” means something very different than “goodwill for the
purposes of passing off.” Have seen arguments that US unfair competition law
requires confusion and is thus narrower than UK, but that’s only true if you
don’t interpret confusion super super broadly as we do.


RT: might this
help us understand how counterfeiting of a registered TM could be actionable
even without point of sale confusion? does trading on goodwill mean
materiality?


A: around the
world, trading on goodwill is proprietor-based, but does require trading that
causes damage to good will, so some kind of materiality is required.


Bill McGeveran:
mentions in wills and the like: are they rights in gross or coming with
business being transferred?

a: it depends! In the
19th century, courts start to make these connections w/newfangled tm.


Mark Lemley: a surprising number of your examples
involved women. Seems like relatively few women started business but you’re entitled to pass goodwill and
inherit it and continue to operate. And you could transfer the guild privilege
which was supposed to be based on skill.


A: yes, super
interesting! The guild system took care of its own; this was working-class
stuff and didn’t enter the law often until the 18th century. In the
guilds, they didn’t need to sell the goodwill b/c they had the guild privilege—a
public house would need goodwill!

 

Peter Karol,
What’s the Use: The Structural Flaw Undermining Warhol v. Goldsmith

SCOTUS
understood the “use” to be the foundation’s commercial licensing. But licensing
is neither a © use nor an act of infringement. It’s passive grant of
permission/agreement not to sue. Incoherent to raise/evaluate fair use as to an
act that wasn’t a use or infringement.


Error grew out
of weird or misleading posture of the case and lower court treatments of the
issues. DJ sought declaratory judgment that Prince Series as such was transformative,
grounded in the artwork itself; a static claim w/o regard to specific use or
purpose. We don’t know why or how he created. Counterclaim alleged that WF
infringed by reproducing, publicly displaying, commercially licensing, and distributing
the image, and by incorporating the photo into unauthorized derivative works.
One of these things is not like the others! Licensing is not found in 106.


DCt follows WF’s
line of thinking: it’s a static case. 2d Circuit rejects the notion that the task
before it was to assess the Prince Series as artworks, but rather whether the
law permits WF to “exploit” them w/o Goldsmith’s permission. Jacobs,
concurring, says only contemporary commercial exploitation is before the court.
SCOTUS oral argument: Goldsmith waived any claims as to creation.


Sotomayor says,
8 times, that the use at issue is commercial licensing. But real focus is on Conde
Nast’s activities as publisher—the next quote is about how the purpose of the
use was the same: “use in magazines to illustrate stories about Prince.”


There was no
evidence of other use by WF itself. A license is a grant of permission to use,
not a use in itself. Even under Chris Newman’s account, which critiques “covenant
not to sue,” the licensor is not the user of the interest. Licensing is not
covered by 106; “to do and to authorize” just relates to indirect liability. It
is nonsensical to analyze fair use as a defense to something that is not
copyright infringement to begin with.


If we wanted to
fix it: acknowledge the issue and say out loud that the Foundation was the
indirect infringer. Conde Nast was the indirect infringer; Goldsmith perhaps
didn’t want to bite the hand that feeds her. Admittedly, this is an invention
that was never litigated; the analysis of purpose would have to be a little
different.


Jim Gibson: “authorize”
could be read differently: licensing something that will obviously infringe
should be deemed a 106 violation. We can call that a form of indirect
liability, but that’s a big apparatus to put on one word.


A: that would be
a hugely important precedent and a huge change to what we understand 106 to
mean. They should say that out loud if they meant to do that. If licensing is direct
infringement, that’s a really big shift—they do diligence on whether they own
the asset, but not on whether their licensing would infringe.


Cathy Gellis:
what is the actual use? Not sure it’s Conde Nast: the use in question should be
Warhol’s. Goldsmith produced the original thing; Warhol used the original thing
and turned it into something else. Then others used/licensed/profited from the
new thing. But it should still go back to the creation. Potential liability
years downstream if that doesn’t matter. Ticking time bomb of anybody who’s an
assignee of something upstream if we no longer care about whether that use was
fair or not.


A: agree on time
bomb, but when they waived the claim against creation, courts said we don’t
have to think about the 80s at all. Ignore the outstanding declaratory judgment
action.


Tyler Ochoa:
Pushing back on Warhol’s addition: only covers changes made to original and not
underlying work. Need some licensing arrangement to pull use of underlying work
into that. But we could interpret Court to say that CN’s use wasn’t fair.


A: true! But they
weren’t a party and the court never said it, so we have to interpolate that.

Q: is there any
causal relationship with other problems with the opinion?


A: not harmless
error—affects the purposive analysis that many find problematic—they keep
reducing it to “use on a magazine cover” “just like Goldsmith is in the
business of licensing”—you can’t do that if CN is the counterparty.


Bruce Boyden: if
it’s an indirect infringement claim, does it change the analysis? Knowledge
would be an element for contributory infringement—they know a lot about what
the direct infringer intends to do, but not other things.


A: quite possibly.
[FWIW, I think vicarious liability is so broad in © that you might be able to
get it done that way, w/o needing contributory liability.] The counterclaim doesn’t
use the language of inducement.


Jeremy Sheff:
Knowledge question comes up in patent law: do you have to know that there will
be use or that the use will be actionable? Not clear there’s a clear © answer
to that. Also, to the degree © is property-like, authorizing someone else to use
a third party’s property is wrongful. But that may just mean Conde Nast has a
claim against WF.


Pam Samuelson:
what if Goldsmith changes her mind on remand? The statements in oral argument cited
by the Court aren’t a real waiver of claim—she waives her right to certain
remedies, and not the claim itself. What if she changes her mind? Asked one of
Goldsmith’s lawyers, and he wouldn’t answer—the case is ongoing.


A: the litigator
in me says you could never rely on it; but it was enough for the Court.

Glynn Lunney,
Transforming Fair Use. 3 Justices were appointed solely on Roe v. Wade, and we’re
stuck with them; there was no inquiry into anything else. Court has no
conception of itself w/r/t interpretive methodologies, so we get incoherence.
Realism: Sotomayor: “the problem of substitution, ©’s bete noire.” But the
photo isn’t a perfect substitute for Prince, but serve the same purpose,
depicting Prince (as if Goldsmith had a © in his features) and they vie for the
same dollars. That defines substitution so broadly as to cover everything—pepper
and salt are substitutes under this logic. The difference b/t Justice Story’s ©
and today: the derivative work right: why would substitution be the core
problem? A motion picture is a complement, not a substitute, so why aren’t we talking
about more than substitution in the first factor? Because of Google v. Oracle,
which says there’s no substitution.


OK, Textualism:
fair use transformativeness is at war with the derivative work right. How can
transform both excuse a work as fair and render it infringing? Well, plucked
one word out of statutory definition—reproduction, abridgement, condensation
are ignored, and words like “sequel” are added out of nowhere. A translation of
Romeo & Juliet is not a new meaning or message, it’s the same meaning in a
different language. So too with book-to-movie. They’re not really committed to
realism or textualism, but to their desired conclusion.


Purposivism: if Warhol
is fair use, then so are many films made from novels, but Congress intended ©
owner of novel to have exclusive right to control making film based on novel.
They’re presupposing this is an answer when it’s a question. Maybe Congress did
intend that, but it doesn’t mean it’s true for all time—fair use is meant to be
an ongoing limitation as tech and other features of the market change.
Reproducing a whole work by mechanical reproduction is a classic infringement,
by the time of Sony, the economics, tech, and nature of use have all changed,
and what’s once paradigmatic infringement is now fair use.


He finds plenty
of criticism in the contrast b/t the standard photo and the portrayal in the
Warhol image. Courts are good at the facts and bad at the law; Court is
deciding fewer cases and we therefore treat them as the oracle on the mountain.
Every sentence takes on independent legal significance. We shouldn’t treat decisions
like statutes, but the problem is that this is likely to be the only fair use
decision for the next 10 years. One strategy: treat it as narrow on the facts.


Key facts: first
magazine use was licensed. We can use balancing, including ease of licensing, to
calibrate fair use—when first use was licensed, failure to obtain license
second time could be presumptively unfair. That’s his hope for future. Stewart
v. Abend & Harper & Row v. Nation could also fit in that model of
presumptive unfairness. Presumptively fair: Campbell. True balancing: G v O,
Sony.


Q: what do you
make of the “iconic, larger than life figure” argument for transformation?


A: don’t listen to
artists or lawyers; compare the two and say can parodic/critical character
reasonably be perceived. If there’s enough difference between them, they should
compete in the market so consumers could choose which is best suited to them—that’s
market success, not market failure.

RTL Richard
Primus’s concept of underruling might be useful. So just disregard the
statements that nothing is presumptively fair use, even book reviews? In
general courts can create general presumptions, right?


A: only as to
the case or controversy before the Court. We’ve gotten into a bad habit of overreading
SCT decisions b/c we have so few of them.


Zahr Said: whose
accounts should we rely on to determine whether licensing is likely to be
successful? Vying for same consumers: salt and pepper—pushback—salt is often
used for preservation, sweat vegetables, etc. There’s a whole functional use
that pepper isn’t part of. When we’re looking at a Court like this, you’d like
an opinion to be tied to the record, but this Court doesn’t always do that. How
do we know where to go to answer those critical questions?

A: Before
Campbell, both parody and satire were fair use. In oral argument, O’Connor said
we don’t have to consider satire in this case and counsel agreed—ethically,
that was 2 Live Crew’s counsel’s job, to throw satire under the bus to give his
client a better chance. If the adversary process fails because it throws
nonparties under the bus, why should we honor that distinction 20 years later?
Satirists never got their day in court.


Sharon Sandeen:
your approach might help solve the procedural errors in the case/record.


A: just trying
to minimize impact.


Q: lawyers
defending this decision think this is better balancing under factor 1, instead
of making transformativeness sovereign over all. New meaning doesn’t
necessarily trump commerciality.


A: disconnected
from incentive theories: these decisions will not get Dr. Seuss to write more
books or Goldsmith to take more photos.


Pam Samuelson,
Did the SG Hijack Warhol v. Goldsmith?


Lying is wrong,
and the SG did it and got away with it. Some twisting of truth in SG’s brief
about 2d Cir ruling. Most important sentence was in a footnote of Court’s
opinion: G abandoned her larger claims so the Court didn’t need to address the larger
issue on which it granted cert. It said very little to provide guidance about
how to distinguish transformative fair uses from derivative works.


OSG said the
only issue before the Court was the 2016 license, but the 2d Circuit opinion
had held that all 16 works created in 1984 were unfair and nontransformative.
AWF & G’s briefs were focused on 1984 creation; all amicus briefs except
OSG’s addressed the creation issue on which SCT granted cert; nobody else got
to brief it except in reply. The SG’s brief said the creation might have been
fair or authorized under the artist reference license, in which case they
wouldn’t be infringing; introduced the notion that every subsequent use must be
assessed as fair or unfair. G’s lawyers reasonably might have decided to shift
argument based on that.


103(a) is the
missing issue: protection for a derivative work employing preexisting materials
in which (c) subsists doesn’t extend to any part of the work in which such
material has been used unlawfully—Anderson v. Stallone, owns no copyright in
script at all. If that’s right, WF has no (c) in Prince series, and museums
& galleries that own the works can’t publicly display or resell them? DCt,
Ct App, & SCt all ignored §103, as did Goldsmith’s counsel.


G wanted her
claim v. WF to seem modest; besides, if she won her derivative work claim, 103
kicks in automatically, and she could begin commercializing the Prince Series,
make derivative works, & stop displays and resales w/o WF’s permission
since it would no longer have rights.


AWF might not
have wanted to raise this specter; may have been overconfident about fair use;
didn’t want 2d Cir to take away its ©.


Maybe the
narrowness has some benefits for appropriation art, but what on earth is the
status of the Prince Series? If she abandoned her claims of infringement, that
would implicitly include her opposition to WF’s SJ motion that the Prince
Series were fair uses. Should the court now grant WF the declaration it seeks?
What if on remand counsel says there wasn’t an abandonment? She gets some or
all of the 2016 licensing fee, but not statutory damages or fee awards. To what
extent is further licensing of W’s works encumbered by her photo ©? Only
licensing to magazines that want an image of Prince? Do people need permission
both from WF and G?


Alternatives: W’s
creation was fair use; but © in fair use DWs only gives rights in their
original expression. Licensing might be fair use if not in same market, but WF’s
© is partly encumbered by G’s © when markets overlap. Another possibility: W’s
creation was lawful b/c of the artist reference arrangement authorized them free
from G’s claims. Restrictions between Vanity Fair and G’s agent can’t bind W, who
had no notice.


Jim Gibson: do
you think fair use is use-specific? I always thought it worked that way.


A: SG just threw
it out strategically to get rid of an otherwise troubling case. We have to live
with it; we haven’t really had a thorough conversation about this particular
Pandora’s box.


Q: maybe bright
side: injunctions shouldn’t be broad, as shown by G?


A: Big fan of
limiting injunctive relief. But footnote 10 of Campbell, which talks about how
something that goes a bit beyond fair use doesn’t necessarily need to be enjoined,
doesn’t grapple with 103(a)’s automaticity, so we do need to think about that.

from Blogger http://tushnet.blogspot.com/2024/02/wipip-session-2-doctrine-fair-use.html

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