False patent marking claims survive even when Dastar bars false advertising claims based on “innovation”

Posted on February 16, 2024 by rtushnet

Lashify, Inc. v. Qingdao
Lashbeauty Cosmetic Co., 2024 WL 629985, No. W-22-CV-00776-ADA-DTG, No.
W-22-CV-00777-ADA-DTG (W.D. Tex. Jan. 30, 2024) (R&R)

Recommendation: Dastar
should block Qingdao’s Lanham Act false advertising counterclaims based on
Lashify’s claim to be the originator of lash technology, but false patent marking
counterclaims should survive.

Accrual: There’s a five-year statute of limitations for
false patent marking; Qingdao identified eight social media posts from Dec. 1,
2017 to Apr. 11, 2023 (claiming that various products were “patented”). It argued that, because all of the statements
are currently still available on Lashify’s website, these were continuous
violations. “[T]here must be a new or different false marking violation in
order to properly apply the continuous violations theory, not merely a
continuous posting of the same falsely marked article.” But there were four
alleged false markings within the five-year limitations period.

Lashify argued that
it held a European patent for one product at the time it promoted that product.
But “to the extent there is a mismarking, it is actionable notwithstanding the
existence of other valid patents.” And “the claim that the Fuse Control Wand
was patented suggests Lashify held a U.S. patent, which it did not receive
until” later. So false marking as to that was adequately pled. And an ITC
determination that a claimed patent didn’t cover the marked product was
sufficient to allege false marking, even if ITC determinations aren’t binding
law. “[A]n alleged discrepancy between the defendant’s marking and its prior
litigation history is sufficient to allege false marking.”

Qingdao also
sufficiently pled the requisite intent to deceive. At the pleading stage, “the
inference of intent to deceive may arise from evidence that a defendant knew or
should have known the marking was false.” Sophistication also matters:

Lashify has repeatedly publicized its knowledge of the workings of the
U.S. patent system and proclaims its sophistication in its knowledge of U.S.
patent law. It is reasonable to believe Lashify would know which of their
products are covered by patents, and which are not. Further, Lashify was
marking products for the first time as patented, not failing to remove expired
patents.

And there were
sufficient allegations of competitive injury:

1)     by improperly and knowingly falsifying
intellectual property rights, Lashify has impeded lawful market entry and
competition including as it relates to Qingdao; 2) Lashify’s false
representations have been accepted as true and proliferated by relevant consumers,
creating a landscape that is prohibitive of competition and new market entrants
like Qingdao; 3) The false reputation of legitimate intellectual property
rights in the eyes of relevant consumers has harmed and tagged Qingdao and
others as frauds and copycats; 4) Consumers who have internalized Lashify’s
false messaging are primed to immediately dismiss competitors as “uncreative
wrongdoers”; 5) Lashify sought to deceive potential customers into believing it
is an innovator and that competitors were “copycats” with the express purpose
of driving sales away from competitors; 6) Lashify was successful in driving
sales away from competitors, including Qingdao, to Lashify based on its false
representations; 7) Lashify’s customers believe and rely on Lashify’s
representations when deciding what products to purchase; 8) consumers have
commented that “I can not believe the amount of copycats out there I… refuse
to try anything else” and “I would NEVER buy a knock-off brand”

However, there may
be trouble ahead because the false patent marking is apparently only part of
the Lashify campaign to position itself as the innovator.

The false marking
statute didn’t preempt Lanham Act claims based on false statements about
patents (as long as, unlike the strict liability for other false advertising
claims, false statements about patents were made with bad faith). (Seems to me
that the court should have addressed the continuing violation theory here as
well: Although false marking may happen just once, we might want
to treat the advertising differently under advertising law.)

But Dastar
bars claims based on statements about inventorship and innovation: 1) Lashify’s
principle is “the leading innovator worldwide when it comes to lash technology”;
2) they are “The Mother of Invention”; 3) Lashify invented “the first DIY lash
extension” and “Underlash Technology”; 4) they are the inventor of the “worlds
[sic] only” and the “worlds [sic] first DIY lash extension system”; 5) they
“invented the most natural-looking false lash system in the industry.”

This isn’t a false
statement of origin (but what about character or qualities?) because the “origin”
of goods “refers to the producer of the tangible goods that are offered for
sale, and not the author of any idea, concept, or communication embodied in
those goods.”

However, the Noerr-Pennington
doctrine didn’t apply to this case at this stage of the litigation. “The Noerr-Pennington
doctrine serves to protect private parties from liability when they petition
the government for laws or interpretations of existing laws favorable to them.”
At this stage, there was no indication that the doctrine applied to the statements
at issue.  

from Blogger http://tushnet.blogspot.com/2024/02/false-patent-marking-claims-survive.html

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Damages questions preclude certifying a Lanham Act false advertising plaintiff class

Posted on February 16, 2024 by rtushnet

Ciccio v.
SmileDirectClub, LLC, 2024 WL 559235, No. 3:19-cv-00845 (M.D. Tenn. Feb. 12,
2024)

The court denied
certification to a proposed class of dentists/orthodontists over SDC’s
allegedly false advertising for its plastic aligners/teledentistry services,
based on difficulties identifying harm/causation.

Under Lexmark,
“a plaintiff suing under [the false advertising provision of the Lanham Act]
ordinarily must show economic or reputational injury flowing directly from the
deception wrought by the defendant’s advertising,” which is usually
accomplished by showing that the defendant’s “deception of consumers cause[d]
them to withhold trade from the plaintiff.” “Each individual member of the
putative class, therefore, would need to establish an actual effect on
consumers resulting in injury—not to the broad community of dentists and
orthodontists—but specifically to him/her and his/her practice.” This they
could not do.

“Consumer
motivations are complex, and a court cannot simply ‘assume[ ] … that every
[purchase] during the relevant time period was the result of [the defendant’s]
allegedly false statements.’” The consumers here were many, “with different
needs and preferences.” Even if falsity/misleadingness of the ads was a common
issue, that wasn’t enough. “[T]he question of whether, and to what extent, any
given plaintiff was actually injured by one or more of the statements will
depend on plaintiff-specific contextual factors. Drawing a coherent, factually
supported line from a single misleading statement in a company’s advertisement
to an actual economic injury by a competitor is inherently difficult to do,
and, insofar as it would be possible at all for the kinds of statements at
issue in this case, it would be particularly difficult to do on a class-wide
basis.” Thus, causation/harm would predominate.

A presumption of
harm from false comparative advertising wouldn’t help, because this wasn’t a
case in which “the plaintiff’s product was specifically targeted.” And anyway,
a presumption would just help established “minimally sufficient injury—not the extent
of the injury or how it was distributed among class members.” Even accepting
plaintiffs’ expert opinions on damages and even assuming disgorgement as a
remedy, there’d be no way to figure out how harm was distributed. The court
accepted criticisms of one survey, including, interestingly, that it didn’t
give respondents the option of saying that they’d stop pursuing
teeth-straightening treatment altogether, even though many SDC customers might
have done just that if SDC weren’t an option.

Nor did a damage
report adjusting for “[p]otential differences in the prices for” the relevant
services “in different parts of the country and in urban versus rural areas” suffice
because individual dental and orthodontic practices “are likely to differ in
other ways that would be just as relevant—if not more relevant—to whether and
to what extent any given practice was likely to be affected by SmileDirect’s
allegedly improper marketing. For example, some practices may serve a wealthier
patient population than others in the same geographic area, and one cannot
assume that SmileDirect’s pitch—which focused significantly on costs—would
affect each practice’s potential patients in the same way. Similarly, different
patient populations might have different media diets, resulting in different
levels of exposure to the challenged SmileDirect statements.”

Although absolute
precision isn’t required, there’s “a point at which approximation eclipses the
truth so fully that the numbers produced cannot serve the purpose they were
intended to serve.” Lost profits would also be impossible to calculate
classwide because profit margins can vary so much.

Nor was an
injunction-only class appropriate when money damages are so central to the
case.

from Blogger http://tushnet.blogspot.com/2024/02/damages-questions-preclude-certifying.html

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misrepresentation to Amazon isn’t “commercial advertising or promotion”

Posted on February 16, 2024 by rtushnet

Amazon.com, Inc. v.
Wong, 2024 WL 553695, NO. C19-0990JLR (W.D. Wash. Feb. 12, 2024)

This default
judgment actually analyzes the false advertising claims, which is why I note
it. Amazon and Nite Ize sued Wong for selling hundreds of thousands of dollars’
worth of counterfeits of Nite Ize’s mobile device mounting products on Amazon
using “false credentials, including aliases, forged bank records, and
fabricated invoices” to create accounts. Obviously, the trademark-related
claims succeeded.

However, the false
advertising claims by Amazon failed, because Amazon didn’t allege that
defendants made false statements in commercial advertisements for the purpose
of influencing consumers or that Amazon was in competition with Wong. (The
default raises its ugly head, since Lexmark would deal with the second
issue). Instead, Amazon alleged only that defendants made false, misleading,
and deceptive statements that “were material to Amazon’s decision to allow them
to sell their goods on the Amazon store because Amazon would not have permitted
them to sell their goods but for the deceptive acts.” This wasn’t commercial
advertising or promotion.

from Blogger http://tushnet.blogspot.com/2024/02/misrepresentation-to-amazon-isnt.html

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FTC’s new rule against impersonation includes notice of supplemental rulemaking on impersonating individuals

Posted on February 16, 2024 by rtushnet

 Read all about it.

from Blogger http://tushnet.blogspot.com/2024/02/ftcs-new-rule-against-impersonation.html

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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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