Rebecca Tushnet

WIPIP, SESSION 2.B. — Copyrights

Posted on February 12, 2021 by rtushnet

Cathay Smith, University of Montana Blewett School of Law

Weaponizing Copyright

Pure suppression: Dr. Drew’s minimization of Covid;
YouTubers compiled these clips and he sent takedown notices. Lawyer asserted ©
over text messages to ex partner when they were published on a blog by the ex
partner to substantiate that she experienced abuse. Netflix v. negative tweets
of those who shared the trailer of its controversial film Cuties (but only
negative tweets). Religious © assertion to control doctrine. Suppressing
criticism, but not necessarily suppressing content. Finally, punitive
assertions: Hustler v. Moral Majority; Campos Santos v. Pewdiepie where a game
studio asserted © against Pewdiepie b/c of his racist comments in livestreams
of another game. Sony v Cohen: Sony says an artist who’s trying to terminate
transfers can’t use album artwork in advertising his work. And another
potential candidate: moral rights/no econ interest: Pepe the Frog v. Alt-Right,
Greenblatt v. McCloskey (the St. Louis gun couple who used photo of them);
musicians v. Trump, Success Kid’s mom v. Steve King; Anish Kapoor v. NRA (for
using Chicago’s Bean). To preserve privacy? Much scholarship on this—Hill v.
Public Advocate (engagement photos used in anti-gay political ad); revenge
porn; Monge v. Maya/secret wedding photos.

Copyright is asserted for personal interests, not market
exclusivity/economic interests in the work. “Weaponizing” can be good or bad—a
weapon can be in the hand of an aggressor or in the hands of
powerless/traditionally defenseless. But there are also abusive uses of © that
seem weaponized for economic purposes: anticompetive uses, abusive overclaims.
Those are excluded from her definition because they’re ultimately financially
driven and have money/market objectives.

Why ©? It’s better than other causes of action which are
limited by 1A and §230.

Blurry lines/overlapping objectives—erase information/bury
facts, suppress speech/criticism, punish/retaliate, protect
dignity/reputation/against tarnishment, preserve privacy—but the lines are
blurred and overlapping. Greenblatt says it’s not about the money when he
asserts rights against the gun toting couple, but is this about dignity, or
retaliation when they’re smugly handing out greeting cards with them pointing
guns, or punishing speech, or money, or all of these things? Hard to find a
line within © that will allow her to distinguish revenge porn victims from
Harvey Weinstein for purposes of identifying abusive claims.

Lemley: maybe this is more about how © has infiltrated our
lives so that we all exist in a field of uses and infringements—society couldn’t
exist if we stopped all that but it means there’s an ability to invoke the rule
“you’re all violating the law all the time” in order to achieve non © goals.
One way to deal with that is at the back end—weeding out bad uses—but maybe
this is more about the overall problem that too many things are ©able and too
many things are infringing.

Guy Rub: reminds him of Wendy Gordon’s anti dissemination
motives from the 1980s—sounds like manybe all of these would be washed away by
fair use.

Andrew Gilden: Note that trespass law is weaponized all the
time—who has the ability to get the cops to come harass their neighbors? What’s
the comparative power dynamic in ©? Is it more egalitarian?

Yvette Liebesman: the McCloskeys are suing Redbubble, the
photographer, and others for trespass, violation of publicity rights—for the
same images that they used to become famous. They are trying to get awarded the
©.

Jake Linford: is there a way to structure this to allow
punching up but not punching down? Compare attractiveness of Simon Tam’s claim
v. that of the Washington football team. May be difficult to do.

Annemarie Bridy: Google sees a ton of DMCA abuse.
Intermediaries can sometimes step in where legislatures are paralyzed, though
laws against nonconsensual porn are now coming in. Now when we get a DMCA
complaint, we don’t take them down for © reasons but for violation of the
policy against nonconsensual images. A way to keep © more in its lane.

Xiyin Tang, UCLA School of Law

The Privatization of Copyright’s Public Law

Subtle but profound shift: shifting public-facing principles
to require/defer to private agreements. The old strategy: extending © by
statute: in the 90s, term extension, foreign works, anticircumvention, adding subject
matter. The new: contract around the statutory limits. Or get the statute to change—the
revision of music license ratesetting by wiping out public interest/access
considerations to be replaced by “willing buyer/willing seller.” Contracting
out of first sale by framing functional sales as licenses.

Although misuse isn’t new, the fact that it hasn’t much revived
in response to these changes shows something about deference to private markets.
Contracted to more antitrust-like situations. But misuse is important when,
say, © owners create tuggable blanket licenses that allow them to remove any
uses to which they object—super-moral rights. And while Art. 17 requires a
complaint/redress mechanism for material that is used lawfully in criticism,
review, pastiche, it doesn’t say anything about penalties for wrongful blocking.
They could just send multiple takedowns.

Lemley: what do we do about Content ID? The cops playing
music to prevent records of their behavior being shared are doing a bad thing.
Neither side should be able to demand perfection or the platform will have to
pay statutory damages.

Tang: statutory damages could be a sliding scale—an AI that
messed up could mean a few hundred in statutory damages. There is a deterrent
effect.

Andrew Gilden, Willamette University College of Law

Capacity and Copyright

AI and © discussion hasn’t discussed mental capacity at all.
Creative spark is required, but there is no additional threshold of capacity.
Example: Ron Swanson’s
will, which he wrote when he was 8: it would not likely be probated, but is
almost certainly ©able. Children can’t execute a will, but they can create. But
note that both © and trusts/estates are supposed to structure rights for heirs.
If the dominant theory of © is that authors are rational actors, that’s difficult
to reconcile with not having a capacity requirement.

Capacity requirement protects individuals from exploitation;
the concerns are also present w/authors but not in expected ways. Authors who
lack ability to contract can be highly vulnerable to family members—example of
Britney Spears who can produce highly valued IP but is not allowed to control
any of it. If she were unable to author works during incapacity, perhaps there’d
be more incentives to work to restore her capacity. Parents’ decisions to
commodify children might be questionable.

However, capacity doctrines are discriminatory in application.
Burden people w/disabilities; insane delusion doctrine is applied to invalidate
people w/marginalized beliefs (such as a donation to the National Women’s Party
rejected for neurotic degree of feminism).

Also, perhaps capacity is in tension with ©–the cultural association
b/t creativity and madness is a long one.

What would a capacity requirement look like? Author should
have a general awareness of context in which they are creating; ability to
deliberate about creative process; voluntarily participates in fixation; be able
to connect these elements in a coherent plan. Perhaps an age limit, though not
sure what that would be.

Victoria Schwartz: © is about acquiring rights rather than
giving them away. Assignments/WFH agreements seem better candidates for
capacity requirements/analogies to wills.

Gilden: Agrees that giving rights away is an issue, but also
interested in why we give people © in the first place if they lack capacity.

Zvi Rosen: Coverture and ©. (I couldn’t find a book by that
name but this
looks interesting.) Where would the © go with a capacity requirement: would
it dissolve? Or go to someone else?

Rebecca Curtin: note that the capacity to marry is lower threshold.

Gilden: what’s closer to the core of autonomy/human choice?
Interesting question.

Sean O’Connor, George Mason University, Antonin Scalia Law
School

Part of “Means of Innovation” project—trying to expand our
interpretation of the IP clause by showing how French philosophes were thinking
about it. Uncovering meanings of words before late 1800s that have very
different meanings today. Takes seriously that you look at writings, authors,
science v. discoveries, inventors, useful arts in the Clause. Art is the way we
do something in the world; science is the way we step back as an observer and
systematize. Title confusion: is this just a historical paper?

Covid brought new attention to ©’s role in science, not just
artistic expression. Premise: of standard IP justifications, no one has won
out. We have no real sense of © because of shift from protecting substantive
scientific expression to protecting artistic content.

Deep purpose of ©: to get things out of manuscript and get
them into circulation, even before the printing press. Publishing as a concept
goes back to Greco-Roman times: to make public statements. Censorship was
secondary; the idea was to control all fields through guilds, and printing was
thus a guild occupation. But the Enlightenment sought public availability v.
private hoarding of knowledge, especially among guilds. Desire: codify
knowledge in text and plates and put out there for all to access and learn
from. Statute of Anne flows from that background. Important that Statute of
Anne provides for library deposit. Notably, music was confirmed as statutory
subject matter on its basis as a science not an art: Bach v. Longman, 1777;
judge expressly compares mathematical and scientific notation to musical notation
and says former is ©able so latter is too. That’s why there’s no performance
right. Musical notation is a mode of analysis.

IP clause: in that reading, creative or fine arts appear
intentionally left out. Probably because that was all that was needed for
national economy/defense. An argument in favor of saying that the Constitution
only provided limited powers. Framers aren’t against © for fine arts, but they
were leaving it to the states. Unprotected subject matter like pre 72 sound
recordings were in fact protected under state law.

Confirmed by 1790 Copyright Act limited to maps, books, and
charts. Argues that we allowed new subject matter for sheet music—added again
in science mode—and engravings, because engraved plates are key for scientific
publications such as encyclopedias and Grey’s Anatomy, as well as official
documents like stock and currency. Thus, in early 1800s, expansion of © is
still for knowledge, not pure creativity.

It’s at the end of the 1800s that art and science start to
shift, and art shifts to meaning fine/decorative/creative arts, not just
artifice/manipulation of environment for functional purpose, while science gets
narrowed from generalizable knowledge to more tech-focus. We’re losing our mooring.
Nothing changed in the Constitution but the subject matter expanded without
coherence.

So what? If we’re not going to roll back subject matter, and
he’s not advocating that, then what do we do about the expansion exceeding
Congress’s constitutional authority? Maybe we just give up on the IP clause as
a constraint. Or do we try to revise it? That’s probably infeasible. We just don’t
have a coherent account, and until we do we will be in a muddle. Even more
practically, if the protection is for creative works, then utilitarian justification
only probably does not work. Attribution/integrity would have to be brought in.

Tyler Ochoa: Malla Pollack’s article on meaning of progress
as dissemination is relevant/consistent. But on federalism: the Federalist
Papers say that states can’t do this effectively, and he’s seen nothing making
that distinction b/t creative arts and scientific knowledge—might just drag
creative arts incidentally along with it. 1802 protection for prints is only a
few years after the first © Act, but nothing in the Act says it’s limited to
scientific purposes even if that’s the core motivation.

Derek Miller: The Stationers/publishers are the other piece:
the authorial right arises out of opposition to the publishers, and your
account seems to leave them out. The Bach case is about what’s a “writing.”

A: read the case again—he reads it as being a scientific
writing.

Zvi Rosen: Ruth Shaw Leonard wrote a great dissertation in
the 1930s where she went through every registered Mass. ©, worth looking at.

A: Agrees that by the end of the 1800s it’s all fine arts,
but that’s the problem.

Rosen: to what extent is that about constitutional
interpretation?

A: Commentator at the time notes the shift in use of the
term: useful arts have become “technology,” and so they just ignore the word “useful”
and say the clause protects “arts and sciences.”

Peter Karol: Q about role of religion. So many engravings
were religious.

A: theology would be the related science. Even if I’m right,
there’s so much stuff that seems to be conveying wisdom/systematic knowledge of
environment. If you’re conveying substantive knowledge about the religion, then
it’s part of “science.” So the fundamental difficulty is: when does it cross
the line from knowledge to entertainment?

Tang: what did the Framers think the relationship b/t © and
patent was? What work was © doing that patent wasn’t already doing in this framing?

A: patents were still evolving at the time especially in
terms of what disclosure was required. Instructive that they don’t use those terms,
patent and ©, because they didn’t necessarily want to adopt the European
versions. But the paradigmatic way of scientific dissemination at the time was
treatises—think of Euclid etc.

Christine Farley: Invention of photography as changing how
we think of fine art: as representational and therefore a way to disseminate
knowledge.

A: you keep getting these dual use media where you can do
both; even the Greek plays were about teaching morality. The original system
keeps breaking down—the Enlightenment dream is about identifying knowledge, but
much creative expression conveys important info.

Graham Reynolds, Peter A. Allard School of Law, University
of British Columbia

Critique of IP as property: protects the power of the
already rich & powerful, especially people who are white/male/from the global
North. So could replacing the property concept make © more equitable?

Frequent references to © as property in courts,
legislatures, constitutions around the world complicate this effort. Building
on literature by exploring progressive property theory as a response: PPT
recognizes that common conception of property as protection of individual
control over specific resources is legally influential and intuitively
powerful. But inevitable impact of one person’s property on others make it
inadequate. Have to look at underlying human values and social relations. That
can help © theory, and it can also help PPT—which may need more attention to acquisition
of rights and redistribution, both of which © theory has explored. We can also
look into the back catalog of property theory more generally to find more
useful building blocks.

Lemley: Understands the desire to make the best of a bad
situation, but fears it’s still a rigged game. Adoption of property rhetoric
has not led us either in IP or in property law to progressive policies; the
instinctual/easy sell of “absolute despotic dominion” is powerful. What to do
about that? Maybe not talk so much about extending PPT from real property but more
about how we differentiate types of property.

Rub: the problem isn’t property per se, but what people
think property means! Let’s assume we can change people’s minds: does it solve
the problem that both “good” and “bad” people use © to further their interests?

A: might help in certain ways around how we define reproduction;
fair dealing/fair use; but not a total reconceptualization.

Tang: Note that © owners move away from property when it
helps them: characterizing sales as licenses, which doesn’t work in real property;
characterizing works as their “children” where it would no longer be acceptable
to say you own your actual children.

Carys Craig: Canadian SCt case accepting notion of © as
property was a throwaway sentence without debate; we do have to deal with it
strategically but may not need to be resigned to it. It’s not property that’s
the problem but rhetoric and imagination.

Bita Amani: Unjust enrichment as another relevant concept—uses
and abuses.

RT: Another variant of the worry expressed by some of the
comments: At least some defenders of expansive exclusive rights are presenting ©
as already progressive: CO educational materials trying to get students to
think of themselves as creators and therefore to refrain from what we call
copying, or infringement (compare to the quote from a progressive economist as
reported by John Maynard Keynes: “[w]hen he was asked if he favored private
property, Montgomery replied, ‘I do—so strongly that I want everyone in Texas
to have some.”’); claims that © is a way for members of marginalized groups to
build wealth without starting with other social capital.

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Posted in Uncategorized | Tagged copyright, SESSION 2.B. — Copyrights conferences, WIPIP | Leave a comment

WIPIP, PLENARY SESSION 1 — Race, Gender, and IP

Posted on February 12, 2021 by rtushnet

Dan Burk, University of California, Irvine School of Law

Racial Bias in Algorithmic IP

Unpacking bias: divergent meanings: statistical bias (sampling),
design (wrong type of model, model created for one purpose used for another), the
fact that “raw data” is an oxymoron, social bias (inappropriate social outcome—different
than the bias that designers often talk about, so they may talk past each other
even if there’s overlap). This can make some responses beside the point:
transparency, auditing, “human in the loop”—those are mostly attempts at better
technical accuracy. That’s a red herring. Example from criminal justice: parole
determinations. Zip code is a major factor in these, and that’s correlated with
poverty and race. It’s a really good predictor, but that’s the wrong question:
why do we put up with that connection/digital redlining? An AI patent examiner
that rejects/narrow claims based on race of inventor, that’s not inaccurate to
past practice. It’s wrong in the sense of being immoral and [supposedly]
socially unacceptable.

Machine bias may be the wrong question. Let’s deal with the
bias in the system; it doesn’t matter whether it comes from a human or from an
AI trained on the past practices of humans. But there are differences in
practice: Illusion of objectivity; humans put too much faith in numbers, Donna
Haraway’s “God trick” in which the human is no longer visible in the picture. E.g.
overweighting of numerical evaluations. Algorithmic performativity: they enact
what they assume and create their own social facts. The yearly ranking of law
schools by USNWR. Wendy Chun suggests: we should use these systems as
diagnostics. We don’t think a weather forecast is diagnostic or that it can be
used to create better weather; we can use AIs to find out what our biases are.

Ann Bartow, University of New Hampshire Franklin Pierce
School of Law

Ruth Bader Ginsburg’s Copyright Jurisprudence (with Ryan Vacca)

Strong copyright and liberal politics. As a DC Circuit judge
and SCt Justice, she authored sixteen opinions in © cases, ten majority, four
concurrences, two dissent, and joined 11 others, ten majority, five of which
were unanimous, and one concurrance. Mostly owner-favorable and Goliath over
David, which may seem surprising. Five opinions favor authors: Tasini, Eldred,
Golan, Reid (WFH), and arguably Muchnick, the followup to Tasini. Many were in
favor of owners: Petrella, Nat’l Cable TV Ass’n v. Copyright Royalty Tribunal,
Atari v. Oman (2x). Concurred in Grokster & Star Athletica; fiery dissent
in Kirtsaeng. But did favor accused infringers sometimes: Fourth Estate v.
Wall-Street.com & OddzOn v. Oman as well as concurring in Quality King. She
joined Campbell, Fogerty v. Fantasy, Feltner, and several others.

Unpersuasive explanations: widely known love of opera and
art (other Justices have those too); Jane Ginsburg’s uncontested expertise (Ginsburg
fille isn’t particularly highly cited by Ginsburg J. and Breyer cited her against
a Ginsburg opinion).

Better: Incrementalism—if judges reach unnecessary issues,
this creates instability/undue stress on judiciary. Evident in gender equality
work and critique of reproductive rights litigation based on lack of incrementalism.
Intergovernmental deference: evolution/interpretation of law shouldn’t be
diatribe against Congress, President, admin agencies, or states, but as dialogue.
Courts have instiuttional capacity constraints and must do this to be effective.
Lily Ledbetter Fair Pay Act after loss at Scotus; Petrella opinion recounts
back and forth with Congress and courts. Atari v. Oman: Sent it back to Office
twice and told them to look at Feist.

Eldred and institutional capacity: worried about whether the
courts were the right institutions to decide duration. How does Breyer know his
economic analysis is right? [Framed as “where is his economics degree from? And
Lemley in chat says “Oxford.”]

Some divergence in © jurisprudence: seemed to favor
alternative remedies in ©–In Tasini, suggested court shouldn’t issue
injunction preventing inclusion of the disputed articles, but instead compulsory
licenses/consent decrees. She was much more skeptical of alternative remedies,
like a lesser military school for women instead of VMI, for gender
discrimination.

Ryan Vacca: responding to chat point that citing Jane Ginsburg
isn’t a great proxy for being influenced by her, and they acknowledge this.

Dalindyebo Shabalala, University of Dayton School of Law

Solomon Linda, Traditional Knowledge Pirate? Mbube, “The
Lion Sleeps Tonight” and Traditional Knowledge

Challenging the originality of Linda’s work as potential cultural
threat. The story: popularized in the 1950s including by Pete Seeger from a pop
music record in South Africa. That song, story goes, was composed by Solomon
Linda, who died penniless while millions were made. 2000 article resurrected
the story of misappropriation and injustice; led to a suit against Disney.
Settlement elided the basic question of who really created it. He argues it
should be tested in court because it’s a key issue in TK: What happens when a
traditional piece of music gets translated, derived from, built on, recorded,
and moved into the © system? The classic TK story is an outsider coming in and
taking it into the © system. Story of Linda is, he suggests, a much more
traditional trajectory: an insider who traverses the boundary of the community
to the outside and acts as the translator, then lays claim themself to the TK.
Musicologically the origin story is more complicated, and the question of what
rights insiders should get is much more complicated than misappropriation by
record companies.

Linda was an originator of a style. Urban music/dance, built
on tradition of rural Zulu style. He took a wedding song sung by village girls.
Developed in a sharing/building/borrowing culture. How should that affect what
we think the world owes Linda? Community rules may continue to bind insiders
when they try to exploit works outside those communities. We should not think
of this as a new problem. © has always been bound up with nationalism. The
problem to be solved was misappropriation across borders. The problem for
traditional communities is very much the same. Should think about solutions for
insiders who flee.

Bita Amani, Queen’s University Faculty of Law

Law, Race, and Alchemy: Exclusion(s), Existential Crises,
and the Transformative Possibilities of Intellectual Properties

Operationalizing privilege through law presented as formally
equal. Curricula/cultural materials are an important part of naturalizing
privilege. “Exclusivity” of rights: IPRs are part of broader colonial legal
regimes, so why would we expect anything other than disparate impact in rights
acquisition and enforcement? Authorship in fact v. authorship in law is gendered/raced;
work v. play distinction means some of us are disenfranchised from labor/means
of production while others become owners.

Carys Craig, Osgoode Hall Law School, York University (with
Anupriya Dhonchak)

A Feminist Theory of Moral Rights: Creative Agency and
Voices from the Margin

Not surprising that feminism would have something to say
about a right conceived of as intensely personal. Dichotomies: public/personal;
economic/moral; rational/emotional; masculine/feminized; valued/devalued: so
moral rights are the feminized Other. Personhood rationales have therefore
tried to masculinize/propertize the justifications. The image of the artist is
that of the solitary male genius, individualized author. Hegel, proponent of
moral rights, held that women were not capable of art. Kant likewise thought
that knowledge unfitted women for their places. Not clear why a feminist would start
from Kant and Hegel! Moral rights rhetoric is also filled with references to
paternity; patriarchal metaphors of birth without women, right to control
offspring. We need a better ontology of authorship.

A feminist relational theory of authorship locates
creativity in cultural situations and social relationsh; creative capacity is
enabled by relational web. Relational autonomy, capacity to make meaning is the
foundation of authorial rights. Authorship as dialogue/relationships of
communication. Every text is multivocal; for feminists, this invites
exploration and activating of the unvoiced, exiled world of women (Mary O’Connor).

Could say that integrity right ensures dialogue is a real
one, but we think that clings to the romantic idea of there being a single
meaning bestowed on work by author, and dialogism refutes that at the core. Risk
of weaponizing moral rights against those who critique the dominant culture. Integrity
right misundersands relationship b/t author, text and public in way that casts
disruptive dialogic engagement as moral and legal wrong; not consistent
w/feminist politics of confrontation, resistance, and social reform. Example: Fearless
Girl attacked as violation of moral rights of bull sculpture’s sculptor.

But: attribution right deserves attention through feminist
lens. Tracing who is speaking, from where, on behalf of whom can be about
feminism and authorship. De-Kanting acknowledgement: Kant thinks that the harm
is compelled speech, but feminist theory is that the harm is the silencing, the
refusal to acknowledge that someone has spoken. The power to make knowledge
claims v. the people who have been erased from/made invisible in our narratives.
Attribution is a call against erasure.

Caveat: it doesn’t follow that © is the right space to
achieve political goal of amplifying marginal voices given the bluntness of
legal tools and power needed to wield them. Empowering communities of practice
is the goal. Moral rights don’t occupy a moral high ground; they’re based on
the same patterns of exclusion and control as ©, but can benefit from feminist
reeimagining.

Moderator: J. Glynn Lunney, Texas A&M University School
of Law

Lemley: AI does expose some fundamental contradictions in
what we think of as inequality: a broader problem of how we measure equality
and how we want to balance procedure and substance. Making that explicit can be
useful.

For Bartow: Don’t shy away from the harm she did in throwing
out Sony in her Grokster concurrence, Petrella and its authorization of a wave
of © lawsuits forever, etc. There are interesting agency/courts/etc. metrics to
all of these, it is still worth noting that she ends up on the side of the ©
owner and he doesn’t think that’s a coincidence.

Burk: all human tech may be prosthetic: cars are feet
prosthetics; AIs may be cognitive prosthetics, but bring all human baggage.
Amplifying and disclosing may be the useful parts—using them as diagnostics to
figure out where we’ve been screwing up. But they are our messes to solve.

Bartow: yes, and that’s painful about this project.

Betsy Rosenblatt: For Shabalala: Norms are good at governing
in communities, but they are really bad at governing outside of communities.
Natural takeaway might not be that everyone owns TK but that no one does, but
that may be imposing a norm on the group from outside. Maybe that’s exactly
where we need laws (when it moves outside the community) but then whose rules
should we adopt as the law?

Shabalala: This is the key part of the project. The premise
has to be cultural sovereignty: the only communities with a strong claim have
to build on a preexisting political sovereignty, b/c the right to regulate
citizens’ lives is built on sovereignty. Rosenblatt says that’s a very American
way of looking at sovereignty, but Shabalala responds that African nations have
wholeheartedly adopted it, although there are sub-sovereign, sub-metropolitan
communities that are clearly left out of this formulation, and that is a real
problem. Reaching outside the community is required to regulate exploitation,
but TK may not be the answer.

Amani: Note that in the US the definition of an Indian comes
from the federal government; the problem is complementarity of structural
inequality that is imposed.

RT: for Craig: Is this a right/interest of the author or a
right/interest of the audience? Consider anonymity; women writing as men; whites
writing as natives.

Craig: it’s about
relationships, with text as vehicle for dialogic engagement. Ideally we’d know
who is speaking, but wouldn’t insist upon removing anonymity. Risk of silencing
voices with removal of anonymity matters. [RT: we valorize some kinds of
contestation, but there are situations where the speaker treats the audience as
marks to be exploited—good to think about those situations when conceptualizing
moral rights.]

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unconscionability prevents enforcement of arbitration agreement for consumer claims

Posted on February 3, 2021 by rtushnet

Cabatit v. Sunnova Energy Corp., No. C089576, —
Cal.Rptr.3d —-, 2020 WL 8365909 (Ct. App. Dec. 31, 2020)

California isn’t fond of mandatory consumer arbitration.
Here, the court finds the arbitration agreement unconscionable and refuses to
enforce it against a claim relating to the solar power lease agreement between
the Cabatits and Sunnova. The rule of McGill v. Citibank, N.A., 2 Cal.5th 945 (2017)—that
an arbitration agreement waiving statutory remedies under California consumer
protection law is unenforceable—was unnecessary to the decision. Because
Sunnova didn’t argue in the trial court that the arbitrator had to determine
the unconscionability issue, that issue was waived; the arbitration clause was procedurally
and substantively unconscionable under general principles independent of McGill.
Some details:

The salesperson said the Cabatits
did not need to read the agreement language because he would go over the
details, but the Cabatits would need to sign the agreement and initial certain
parts before any work could be done. The salesperson scrolled through the
agreement language quickly, indicating where signatures or initials were
needed.

Indiana Cabatit speaks and
understands English fairly well, but she does not understand complicated or
technical terms. As the salesperson scrolled through the agreement language,
Indiana Cabatit signed or initialed where the salesperson indicated, even
though she did not understand most of what he was saying. The salesperson did
not explain anything about arbitration.

The Cabatits had no computer and no
internet access. They did not receive a copy of the agreement until this
dispute arose and their daughter obtained a copy.

This was a procedurally unconscionable contract of adhesion,
with no opportunity to bargain over terms, which were not explained anyway. It
wasn’t enough that Indiana Cabatit signed a statement that she had read the
terms of the agreement, and even if the arbitration provision was “conspicuous”
in the abstract, the evidence was that the salesperson scrolled through the
agreement, and the arbitration clause was not called to the Cabatits’
attention. And any right to cancel within 7 days “was meaningless because
Sunnova did not give them a copy of the agreement during the relevant time
period and there is no evidence such a right was explained to the Cabatits.”
The context indicated oppression and surprise, resulting in “a high degree of
procedural unconscionability.”

Substantively, this was a one-sided agreement which required
the Cabatits to arbitrate their claims, but allowed Sunova to file in court if
the Cabatits defaulted (defined as failure to make a payment, failure to
perform an obligation under the lease, providing false information, or assigning
the lease without prior authorization). “In other words, Sunnova reserved the
right to take most of its claims to court but purported to deny the Cabatits
the same opportunity.” Although the Cabatits were allowed to go to court to
seek (1) injunctive relief for any threatened conduct that could cause
irreparable harm, (2) a judgment confirming the award, or (3) a small claims
judgment, that was still too one-sided given the breadth of “default” favoring
Sunnova. Sunnova didn’t show it had special need for this one-sidedness.

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survey sustains false advertising claim alleging misleading use of military imagery

Posted on February 3, 2021 by rtushnet

Mahindra & Mahindra Ltd. v. FCA US LLC, 2021 WL 323253,
No. 18-cv-12645 (E.D. Mich. Feb. 1, 2021)

Plaintiffs sued FCA for a judgment of noninfringement of the
Jeep grille design in its Roxor vehicle (which dispute mainly took place in the
ITC), and FCA counterclaimed for, among other things, false advertising (over
which the ITC lacked jurisdiction). Here, the court denies plaintiffs’ summary
judgment motion on the false advertising counterclaim, which relates to an ad
that allegedly misrepresented plaintiffs’ vehicles’ history with the US
military.

The Roxor’s design and construction is “based on a long line
of military-style vehicles that [plaintiffs] have been manufacturing and
selling in India and around the world for over 70 years, since the end of World
War II.” The 30-second
ad at issue

features Roxor vehicles of various
colors driving on unpaved mountain trails, along with various images of
individuals camping, hiking and chain-sawing logs. It also includes various
military imagery and references. According to Defendant, “more than 20 seconds”
of the 30-second Advertisement displays such military-inspired elements,
including the U.S. Army star logo, a vehicle operator wearing camouflage in a
camouflage vehicle, an Army green version of the Roxor, a man dressed in Army
green attire, and the Roxor logo on an Army green background. Plaintiffs
emphasize that the U.S. military “is never mentioned in the commercial.”

The Advertisement’s voice-over
script is as follows:

When the mission calls for
military grade grit, call in an off-road vehicle built on more than 70 years of
hardcore heritage. The one that makes “there’s no way we’re getting out of
here” the best news you’ve heard all day, and answers menacing terrain with,
“Is that all you’ve got? Get out there in legendary off-road vehicle: Roxor,
from Mahindra. There’s plenty to be done.

FCA argued that this ad falsely evoked a connection with the
US military. (Twenty years ago, there were a handful of cases saying that
claims like this—the D’s ad falsely connected it to a third party—asserted
someone else’s rights and so the non-owner-plaintiff was not the right
plaintiff, but that reasoning probably doesn’t survive Lexmark.) (FCA
also argued that evoking the US military “suggests a shared-legacy between the
Roxor vehicle and the Jeep® brand and the Jeep® brand’s U.S. [mi]litary’s
heritage,” though that really seems a bridge too far—no pun intended—and the
survey, wisely, didn’t bother to test that idea.)

Hal Poret conducted a survey for FCA, which he concluded
found that: (1) at least 46.3% of respondents believe that the Roxor has been
used by the military or has a military history/heritage; (2) 70.4% of
respondents believe that the Roxor is connected to the military; and (3) 37.0%
of respondents believe that the Advertisement’s message pertains to the U.S.
military. In response, plaintiffs argued that “[t]here is no evidence in the
record that a single Roxor vehicle buyer saw the Advertisement.”

The court found that there was no literal falsity; the ad
was ambiguous in using the phrases “[w]hen the mission calls for military grade
grit”; “[c]all in an off-road vehicle built on more than 70 years of hardcore
heritage”; and “[g]et out there in a legendary off-road vehicle: Roxor, from
Mahindra” along with black-and-white footage of a Jeep during World War II.

This was not puffery. The statements and imagery were
neither “exaggerated, blustering and boasting” nor a “general claim of
superiority over comparable products.” The court would not equate “historic
military footage, a claim that something is ‘military grade,’ and a suggestion
that company’s 70 years of heritage is connected to the U.S. military” with “vague
phrases which are ‘nothing more than a mere expression of opinion.’”

The survey was sufficient evidence for a reasonable
factfinder to find misleadingness and deception, at least for purposes of
securing injunctive relief. Among the relevant responses:

[What was the main message or
message of the commercial we showed you?] Roxor is a new off road vehicle that
has a long history of being used in the military.

[What reasons, if any, did the
commercial give for choosing to purchase the advertised vehicle?] Military use
in World War Two; theyve [sic] been used in the military for years.

[What did the commercial say or
show relating to the history or heritage of the advertised vehicle?] It showed
pictures of it working in the military from many years ago; Used by our
military in the 2nd world war [sic]; That the military used this brand for its
jeeps.

Materiality: The court framed this as whether suggesting a
“connection” between the U.S. military and the Roxor was “an inherent quality
or characteristic,” which I find unhelpful for modern materiality analysis. Plaintiffs emphasized that it was undisputed
that the “clip and reference to ‘military grade grit’ comprise a de minimis
portion” of the ad. “[A] rational trier of fact could conclude that the
disputed issues relate to the inherent quality of the Roxor,” since there was
testimony that plaintiffs’ history and heritage was useful to its brand story.
Even though the reference was short, length wasn’t required, given that FCA “pointed
to several instances where Plaintiffs considered the advantages of including
reference to the military grade, which concern the relevant consumer market..”

Causal link to the claimant’s injury: FCA only sought
disgoragement and a permanent injunction, not damages. (Only!) So it wasn’t
required to quantify its damages. Rather, “logical likelihood of damages is
sufficient.” FCA provided evidence that the ad was likely to cause harm,
specifically “causing it to lose singular control over its brand image and
diluting the distinctiveness of the brand, rendering its marketing messaging
less effective and causing it to have to spend more to communicate
effectively.” And: “[Plaintiffs] are trying to leverage the Jeep® DNA just as
we plan to. And based on my own experience, it appears [Plaintiffs are]
targeting people who are interested in the Jeep® brand.” Although some of the
evidence was about the Roxor generally, the Poret survey was sufficient to show
the requisite harm causation.

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Uber avoids taxi suit because of causation problems

Posted on February 1, 2021 by rtushnet

Ezeokoli v. Uber Technol., Inc., 2021 WL 247975, No. A156445
(Cal. Ct. App. Jan. 26, 2021)

Plaintiffs, a putative class of taxi drivers, lost this
Lanham Act false advertising appeal because they couldn’t show that Uber’s
allegedly false statements harmed them (as opposed to Uber’s nonfalse business
model). Uber allegedly misrepresented the availability and proximity of rides
through cartoon images of cars displayed on its consumer app; (2)
misrepresented the safety of its service; (3) misrepresented the legality of
its operations at certain airports; and (4) made false and misleading statements
about driver gratuities.

Uber won summary judgment with “evidence that (1) the
plaintiffs could not show reduced income from driving taxis during the relevant
period; and (2) they could not show that any economic harm was caused by the
alleged misrepresentations.” In particular, “as to the challenged statements
related to safety concerns, only a very small percentage—fewer than 2.5
percent—of Uber users would have seen them.”

Plaintiffs could not succeed on appeal with deposition
testimony from individual drivers that they were working more, but earning
less, once Uber became a competitor. Their speculation that this was driven by
Uber’s false advertising wasn’t enough. Although the Lanham Act expressly
authorizes suit by a person who “who believes that he or she is likely to be
damaged,” standing requires “a real possibility of … being damaged and not the
mere assertion of a belief.”

Nor was an economist’s expert report that proposed a
methodology for estimating their damages plus a promise of survey data regarding
consumer deception. The damages estimate would have been based on the full
competition from Uber; it wasn’t enough to promise to sort out the impact of
false statements later.

No presumption of injury and causation applied because
Uber’s advertising wasn’t directly comparative. In a footnote, the court
endorsed the reasoning of Il. Transp. Trade Association v. City of Chicago, 839
F.3d 594 (7th Cir. 2016): People might prefer Uber’s “storage of payment
information, so that one does not need to be carrying cash or a credit card;
the ability to see a time estimate of how long a pickup will take and also a
driver’s rating by past users; and the ability to request a ride from wherever
one is (e.g., from the comfort of home, inside during the rain rather than by
hailing on a street).”

As to the comparative advertising point, the trial court
reasoned: “Plaintiffs do not show evidence that Uber made actionable
comparative statements in the context of advertising. ‘Statements made to the
media and published in a journalist’s news article concerning a matter of
public importance are not commercial speech and are protected under the First
Amendment.’ ” For example, an alleged statement by Uber’s Head of
Communications for the Americas to a local news affiliate that Uber was “
‘confident that every ride on the Uber platform is safer than a taxi’ ” hadn’t
been shown to have been “made as part of a coordinated advertising campaign or
with the intent to influence consumer opinion.”

Uber’s claims of, for example, the “ ‘safest rides on the
road’ ” and “ ‘always the safest experience,’ ” employed “ ‘an industry leading
background check process,’ ” and “ ‘thoroughly screen[ing]’ ” its drivers “ ‘through
a rigorous process we’ve developed using industry-leading standards’ ” weren’t
comparative in the way that would trigger a presumption of injury/causation
because this wasn’t a two-player market. The trial court found that Uber
“exists in a complex market for personal transportation, and taxis are not its
only, or even its primary, competitor” so any business gained by Uber did not
necessarily mean lost business for taxi drivers. The court of appeals pointed
out that “a survey that even plaintiffs’ expert relied on found that riders
chose Uber over taxis and other modes of transportation for a variety of
reasons, including safety, comfort, ease of use and payment, time savings, and
reliability.” [This reasoning shows the value of a regulatory state that can
act against false advertising that causes generalized risks to everyone in the
market. Also, frankly, saying that taxis aren’t the primary competitor is less
plausible than saying that it’s easy to not use Facebook.]

Plaintiffs’ proposed survey expert “failed to explain how
his survey design would eventually assess the impact of the alleged
misrepresentations on potential riders and distinguish it from other reasons
riders might choose one mode of transportation over another.”

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Videos in conjunction with my advertising law class

Posted on February 1, 2021 by rtushnet

In this pandemic year, I’m experimenting with short videos as part of the pre-class materials. They generally elaborate on a point to set up class discussion. I’m sharing them because, as Tom Lehrer says, they might prove useful to some of you someday perhaps in a somewhat bizarre set of circumstances.

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Book talk: global mandatory fair use via the Berne quotation right

Posted on January 29, 2021 by rtushnet

Tanya Aplin & Lionel Bently, Global Mandatory Fair Use,
AU Book Talk.

Based on their new book.

Art 10(1) Berne Convention: It shall be permissible
to make quotations from a published work; mention shall be made of the source
and name of author if it appears. This constitutes global, mandatory, fair use.
Berne and TRIPS both require implementation of Art. 10. Meaning and purpose of
quotation is broad. Fair because of the requirements: lawfully made available
to the public, attribution, proportionality, consistent with fair practice.
Mandatory language can be contrasted with other exemptions, which say “it shall
be a matter for legislation in the countries” of the union. Drafting history
includes vote to reject making 10(1) optional rather than mandatory.

Scope: applies to all Berne works, not just literary works,
though optional for related rights b/c Rome Convention has no mandatory
quotation right. Also does not apply to moral rights, b/c travaux suggested
moral rights are reserved, and Art 10(3) provides different requirement for
attribution of source.

What’s the meaning of “quotation”? Proposal to limit
language by purpose were rejected; it was intention to leave language open
because couldn’t agree on purposes to which it should be limited. Aplin &
Bently argue: does not have to be short, can be of the whole work, need not be
distinct, need not be used in another work; need not support or further an
argument or critique. None of these individually are necessary conditions for “quotation.”
Many fields use “quotation” to include use of a full work, no requirement of
commentary, no requirement of “quotation marks.” Example: Cézanne’s Compotier, verre
et pommes, 1878-79, shown in Maurice Denis’ Homage to Cézanne, 1900: group of
painters standing around an easel representing the Cézanne: they’re admiring Cézanne’s
work. It is (all but) the whole work; it is not distinct from the rest of the
work; and one might question whether there’s any critique or dialogue: the
dialogue seems to be “isn’t this a great painting and aren’t all those people
admiring it.”

Similarly in architecture there is quotation: Konstantin Melnikov,
Rusakov Club; quoted in James Stirling, Leicester Engineering Building.
Architecture literature doesn’t hesitate to describe this as quotation w/common
trapezoidal forms. Not distinct from the rest but still described as quotation.
Similar examples from film, e.g., Francis Bacon, Study for the Nurse from the
Battleship Potemkin.

In literature particularly, “quotation” is used routinely
w/o any requirement of critique, which contrasts with EU requirement of
dialogue with work being quoted. That’s not the ordinary meaning of quotation,
which includes inscriptions on buildings that edify visitors.

Art 10(1) requirements help constrain the exception:
lawfully made available to public, attribution, quotation doesn’t exceed that
justified by purpose, and proportionality. Made available: wider notion than
publication under Art 3(3); covers making available via compulsory license.
Sticky issues about where the work has to be made available. Suggest that the
better view is that it should be judged according to place of first making
available. Not synonymous w/right of attribution b/c requires mention of the
source and author if the latter appears thereon. As a result, should be
viewed more flexibly, allowing attributions in abbreviated form, indirect,
implicit attribution, or easily identifiable.

Proportionality: “the extent of the quotation does not
exceed that justified by the purpose.” From human rights jurisprudence:
suitability: is quotation capable of achieving purpose claimed; necessity:
whether shorter quotation would be as effective in achieving the purpose and
less restrictive of author’s rights. Counterbalances the removal of “short” before
quotation.

Finally, “fair practice” requirement gives a lot of scope
for considering fairness. Little guidance in the travaux. Reject of three
possible approaches: (1) solely determined by national law, given that it’s
mandatory and normative; (2) informed by relevant state practice; (3)
synonymous with three-step test. Clearly seen as important mechanism of constraining
exception. Fair practice should assess fairness, informed by notions of
economic and moral harm (which may involve considering amount quoted as well as
nature/purpose of quotation as well as size/proportion); freedom of expression
(expressive purpose of quotation, including political v. commercial; nature of
claimant’s work); distributive justice (educational uses, translations, poorly
financed creators); and custom, to a limited extent (drawing on Kenneth Crews
and Jennifer Rothman’s cautionary work on custom). Notions of bad faith wouldn’t
fall within our meaning b/c it’s too vague: manner of obtaining work is better
dealt w/ by other areas of law; commercial motive can be dealt with by
considering economic harm; failure to ask permission is circular.

Differences from WTO’s approach to the 3 step test, which is
very formalistic. 10(1) v. 3 step: latter is narrow in scope and reach, whereas
quotation can be interpreted broadly. Normative value: 3 step in WTO panel view
is fixated on rights holders interests, while fair practice brings a plurality
of interests into play. 3 step test doesn’t require availability to public;
doesn’t take moral rights into account. 3 step is cumulative in nature, while quotation
elements have some overlap, e.g. proportionality and fair practice. Royalty-free
exception while 3-step envisages paid but permitted exemptions. 3 step test is
not the only lens through which to see exceptions: a powerful force alongside
it. Despite TRIPS art. 13: TRIPS art 9(1) says that nothing in the relevant
provisions shall derogate from existing obligations, and 10(1) is an existing
obligation. Therefore TRIPS doesn’t override 10(1), though it can make 10(2)
and 10bis subject to the 3 step test. Similar argument with WCT, as well as
agreed statement to WCT which supports the argument further.

Consequences for US fair use: assessment according to 3-step
test becomes redundant, but would need to pay attention to making available,
attribution requirements, moral rights, and different emphasis for fairness
factors. Also provides occasion to revisit quotation exceptions where they fall
short by restricting purpose (Portugal), limited to types of works (Austria,
Zimbabwe), restricted to short quotations (France, Greece, Serbia), or require
dialogue/incorporation into other works (France, Germany). CJEU decisions are
also incorrect/inconsistent by requiring intent to enter into dialogue with
work, wrongly importing identifiability/recognisability requirement. Parody
exceptions could also be seen through 10(1) and not just three step test: lets
us worry less about definitional distinctions among parody, satire, pastiche,
though that might be relevant to fair practice rather to whether exception
kicks in at all.

Publisher guidelines could also be revisited through this lens;
many publishers are incredibly narrow and risk averse in acceptable quotation.

Peter Jaszi: mentioned questions in Salinger cases about
whether being made available in archives ought to count as available to public.

Bernt Hugenholtz: Shall is not the same thing as may, and it
ought to have consequences. But note that Berne allows different treatment of
nationals. Mentioned discussion in chat about the new EU snippet right as a
related right that could override the quotation right.

Discussion: Because of the mandatory nature of the quotation
right, it should override any related right where that’s necessary to exercise
the quotation right (e.g., a broadcast treaty or special rights for press
publishers that extend beyond the author’s right).

Discussion of what doesn’t count as quotation: perhaps intermediate
copying (though may be required to avail oneself of some kinds of quotation),
reverse engineering.

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surveys/expert evidence of deception still not required in consumer protection claims

Posted on January 25, 2021 by rtushnet

Hawkins v. Kroger Co., 2021 WL 210843, No. 15cv2320 JM (AHG)
(S.D. Cal. Jan. 11, 2021)

Hawkins sued, with the usual California claims, because
Kroger breadcrumbs said “0g Trans Fat Per Serving” on the front and the nutrition label said
“Trans Fat 0g”; the breadcrumbs included partially hydrogenated vegetable oil
(PHO), which meant that they contained “trace amounts” of trans fat.

The use of PHO in food products was legal during the class
period: the FDA allowed producers until June 18, 2018 to remove PHO after it
was removed from the “generally regarded as safe” classification.

So the use of PHO was not unlawful, but was it unfair?
During the class period, there was no public policy against it, and the FDA
declined to prohibit its use then, weighing against unfairness. But the degree
of harm associated with PHO was a material and genuinely disputed fact. “[D]espite
the legality of the use of trans fat during the class period, reasonable jurors
could disagree as to whether the danger of trans fat to human health was sufficient
to render its use ‘immoral, unethical, oppressive, unscrupulous or
substantially injurious to consumers,’” so the court declined to grant Kroger
summary judgment on UCL unfairness.

Labeling claims: The court rejected Kroger’s argument that a
reasonable consumer would understand the breadcrumbs contained trans fat
because the ingredient list included PHO. Not only are reasonable consumers not
required to look beyond misleading representations on the front of the box, but
here it was not clear that typical consumers understood that PHO necessarily
meant trans fat. Moreover, no reasonable juror could find that interpreting “0g
Trans Fat” to mean “no” trans fat was unreasonably “sweeping.” [The FDA did
require rounding down for amounts under .5g, in contradiction to what
reasonable consumers would think. As the court explains, the cases have
therefore held that, “although the FDA mandates the disclosure of ‘0g Trans Fat’
on the nutrition label when the product contains less than 0.5 grams of trans
fat, it does not mandate or allow for the product to be labeled ‘0g Trans Fat’
elsewhere.”]

The court also rejected an attempt to impose a survey/expert
evidence requirement for determining reasonable consumer expectations in
California consumer protection cases. Here in particular, “it is not clear what
else the claim ‘0g Trans Fat’ would lead a reasonable consumer to believe other
than the product contains no trans fat.” Certainly Kroger wasn’t entitled to
avoid a trial.

Hawkins also got summary judgment on the argument that “0g
Trans Fat” violated 21 C.F.R. § 101.62(a)(1)-(2), “[a] claim about the level of
fat …. in a food may only be made on the label …. if … (1) [t]he claim
uses one of the terms defined in this section [or] (2) [t]he claim is made in
accordance with the general requirements for nutrient content claims in §
101.13.” Section 101.13 then provides “the label or labeling of a product may
contain a statement about the amount or percentage of a nutrient if …. [t]he
statement does not in any way implicitly characterize the level of the nutrient
in the food and it is not false or misleading in any respect (e.g., ‘100
calories’ or ‘5 grams of fat’)[.]” Previous cases have held that this provision
doesn’t “authorize” a “No Trans Fat” claim on the label. Though this was in a
preemption context, the logic held here: “No Trans Fat” outside of the
nutrition facts panel was misleading, given that the conceded use of PHO and
thus of “some” trans fat content was actual evidence the “0g Trans Fat” label
was false or misleading. Thus, Hawkins established a predicate for her
“unlawful” UCL claim.

However, even if Hawkins didn’t have to show that a
reasonable consumer would be deceived, there was a genuine dispute of material
fact on reliance/causation, so she didn’t win summary judgment on the entire
claim.

Kroger’s statute of limitations defense also failed because
Hawkins wasn’t required to look beyond the front of the box.

Also, the “0g Trans Fat” label was “too specific to be
puffery.”

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when is a publisher sufficiently beholden to a manufacturer to engage in commercial speech?

Posted on January 25, 2021 by rtushnet

Ariix, LLC v. NutriSearch Corp., No. 19-55343 (9th Cir. Jan.
22, 2021)

Over a dissent, the court reverses the district court’s dismissal
of a false advertising claim against a purportedly independent supplement
guide that allegedly is linked, behind the scenes, with one producer,
motivating its praise of that producer and refusal to praise others. On the facts
alleged, the supplement’s relevant statements constitute commercial speech;
there’s a remand to determine whether the statements are designed to encourage
the purchase of relevant products as required by a remaining element of the
“commercial advertising or promotion” test. There is no First Amendment
protection for “a publisher of supposedly independent product reviews if it has
secretly rigged the ratings to favor one company in exchange for compensation.”

“NutriSearch publishes a widely used nutritional supplement
guide.” It is allegedly “a trusted name among sales representatives in the
direct marketing supplement industry.” It rates supplements comparatively;
companies that get a five-star rating can get NutriSearch Medals of Achievement,
which require compliance with the FDA’s pharmaceutical good manufacturing
practices (GMP) and certification from an approved laboratory that its label
claims are true. The medals are allegedly “described as a binary determination:
either a company obtains [GMP] certification and laboratory verification of the
label claims, or it does not.” In the sixth edition, Usana Health Science was
the only company that obtained the highest ranking, the platinum medal.

NutriSearch allegedly “portrays itself as an independent
company that presents only objective data and scientific analyses to the public,”
claiming “it relies on scientific criteria to mathematically calculate the
ratings.” The guide’s author, the former CEO, appeared on the Dr. Oz Show
promoting the Guide as an evidence-based book that does not have any
“particular bias.” The inside of every edition of the Guide through the fifth
edition stated:

This guide is intended to assist in
sorting through the maze of nutritional supplements available in the
marketplace today. It is not a product endorsement and does not make any health
claim. It simply documents recent findings in the scientific literature.

This guide was not commissioned by
any public sector or private sector interest, or by any company whose products
may be represented herein. The research, development, and findings are the sole
creative effort of the author and NutriSearch Corporation, neither of whom
is associated with any manufacturer or product represented in this guide. (emphasis
added).

NutriSearch removed the second paragraph from the sixth
edition, published after Ariix filed this lawsuit.

However, NutriSearch allegedly rigged its ratings to favor
Usana under a hidden financial arrangement. The author/ex-CEO, MacWilliam, worked
as a Usana sales representative and served on its scientific advisory board
until another company exposed this affiliation. He allegedly told former Usana
executives, “I should not be on the board or a representative anymore because
it looks like I’m biased. I am going to create more of a third-party
appearance, but I’d like you to use me for speaking and support me.” Usana
allegedly agreed in exchange for the number one rating in the Guide, and uses
it in marketing pitches.

Usana allegedly pays hundreds of thousands of dollars
annually in speaking and promotion fees to NutriSearch and MacWilliam in
exchange for being rated the top supplement company in the Guide, accounting
for more than 90% of his income. In addition, NutriSearch allegedly “promotes
certain scientific claims to dovetail with Usana’s marketing campaign, or
emphasizes certain ingredients that Usana has added to its products to ensure
that Usana attains the top ranking in the Guide.”

In 2008, Usana allegedly withdrew its support for
NutriSearch after other companies obtained a medal certification in the Guide,
causing NutriSearch and MacWilliam to suffer financially. Usana allegedly
suggested that Usana would recommence providing fees and speaking engagements
if Usana obtained a number one ranking in some way. NutriSearch released a new
“Editor’s Choice” award and gave it to Usana, and MacWilliam then asked for and
received a nationwide tour from Usana.

Ariix alleged it was wrongly denied a medal certification in
the Guide, including through the use of metrics that exempted Usana from the
same standards. NutriSearch initially rated one Ariix product 3.5 stars, “but
after public criticism and incontrovertible evidence of quality, NutriSearch
revised the rating to 5 stars.” When Ariix tried to get MacWilliam as a
speaker, he allegedly admitted that “[t]hey [Usana] will cut me off the second
I do this [speak for Ariix].”

Were the challenged statements commercial advertising or
promotion? This is “(1) commercial speech, … (3) for the purpose of influencing
consumers to buy defendant’s goods or services, and (4) that is sufficiently
disseminated to the relevant purchasing public.” The omitted (2), everyone here
agrees, is a competition requirement that was abrogated by Lexmark; one
satisfies Lexmark by having a relevant commercial interest and showing
proximate cause.

The complaint plausibly alleged that the Guide was
commercial speech by plausibly alleging “that the Guide is essentially a sham
marketing ploy intended to boost Usana products.” Under Bolger, “speech
that does not propose a commercial transaction on its face can still be
commercial speech.” Although the question was close, the majority agreed with Ariix.

Although the Guide lacked “the traditional form of an
advertisement” and didn’t provide price or availability information,

this fact alone does not tell us
much, especially given today’s sophisticated and subtle marketing campaigns. For
example, companies now pay so-called “influencers” to issue posts on social
media touting their products or services. While such social media posts may not
have the indicia of a traditional advertisement, there can be little doubt that
these paid posts are in fact advertisements. [citing FTC alert; footnote about
how much Kim Kardashian West is paid per Instagram post according to publicly
filed litigation documents]

The Guide also referred to specific products, though that is
far from dispositive.

The Bolger test also asks “whether the speaker acted
primarily out of economic motivation, not simply whether the speaker had any
economic motivation.” Obviously, “not all types of economic motivation support
commercial speech. A simple profit motive to sell copies of a publication or to
obtain an incidental economic benefit, without more, does not make something
commercial speech.” But at the same time, “economic motivation is not limited
simply to the expectation of a direct commercial transaction with consumers.”
Indirect benefits can also count, such as “benefits to employee compensation, improvements
to a brand’s image, general exposure of a product, and protection of licensees’
interests.” The key is whether “the economic benefit was the primary purpose
for speaking.”

FWIW, I think this point could be helpfully sharpened: the
key is whether the hoped-for economic benefit involves people buying some
product other than the speech itself. If you write a song with the intention of
creating an earworm that will have a zillion plays on Spotify, that is not a
commercial speech motivation: you want people to buy the speech itself. If you
write a song with the intention of promoting a beer brand, and you are paid
based on the beer company’s hope of success, then the results are commercial
speech (though there may well be no regulable factual statements in the song).
[My formulation has to do a bit of finessing when there are potentially
falsifiable statements made about the speech itself—“this album costs $9.99” is
commercial speech; that specific statement about the noncommercial speech on
the album is separable from the content of the album, though the titles of the
songs on the album aren’t—but I believe that it addresses the key distinction.]

Footnote: Not any economic benefit will suffice; “speech
that is mainly motivated out of economic benefit can still be fully protected,
such as in labor cases…. Rather, the question is context-specific and requires
determining whether the speaker’s purpose primarily turns on the economic
benefit that the speaker receives from the speech.” [Again, I think we can
usefully distinguish “unions will increase employee pay” from “hire me to do
this job because I have a JD” here, but reasonable minds might disagree.]

Anyway, Ariix “plausibly alleged that NutriSearch and
MacWilliam published the Guide mainly with the economic goal of furthering
their own self-interests beyond simply benefiting from sales of the
publication,” given the facts alleged above. [Emphasis added because this
gets at how I would phrase the distinction.]

The court noted that it wasn’t relying only on alleged
payments. “Many of Ariix’s allegations raise significant doubts about whether
the Guide is an objective compilation of product reviews and suggest that the
Guide is instead a sham marketing scheme intended to benefit Usana,” such as
the allegedly false disclaimer in the first five editions.

The district court noted that the
factual allegations do not show that the defendants should be treated as a
single entity subject to the same conflicts of interest. But showing that the
defendants are so closely related as to constitute a single entity is not
required to plausibly allege that the Guide was published primarily for
economic benefit. We are not asking whether MacWilliam’s actions influence
NutriSearch or vice versa, but whether allegations involving either defendant
reveal the primary purpose of the Guide.

…. Usana even uses MacWilliam as
part of its image advertising; the complaint includes an image of MacWilliam
that states that “I have full confidence that USANA will once again stand out
as an industry leader and will continue to receive an elite standing in the new
Comparative Guide.” That NutriSearch and MacWilliam chose such a strongly
worded yet false disclaimer — disclaiming any association with all
manufacturers in the Guide despite having obvious ties to Usana — raises substantial
questions about the Guide’s true purpose, if the allegations in the complaint
are true.

The court cautioned that its decision was “narrow.”
Consumers face so many choices that they often seek out independent reviews. “But
when someone falsely claims to be independent, rigs the ratings in exchange for
compensation, and then profits from that perceived objectivity, that speaker
has drowned the public trust for economic gain. Society has little interest in
protecting such conduct under the mantle of the First Amendment.” Ultimately,
the majority embraced “a common-sense distinction between protected speech and
commercial speech — in this case, legitimate product reviews versus paid
product promotion …. Simply put, paid promotion is commercial speech.”

This wasn’t just an allegation of bias and inaccuracy—and
here comes a line defendants may well quote: “A mere failure to disclose bias or
financial interest would not necessarily make speech commercial.”

Here, though, we face allegations
that the defendants conceived the Guide to juice sales of Usana products,
actively misled the public about their supposed independence, and fiddled with their
own ratings criteria to boost a favored company that lavishes them with
hundreds of thousands of dollars in compensation. Put another way, it is more
paid promotion than product review, according to the complaint. It is not
controversial to conclude that “liability can arise under the Lanham Act if
websites purporting to offer reviews are in reality stealth operations intended
to disparage a competitor’s product while posing as a neutral third party.”

Nor was this speech “inextricably intertwined” with fully protected
speech. The Guide also “describes the benefits and science of nutritional
supplements.” But the commercial, specifically, the allegedly rigged ratings “are
not so connected to this informational section to lose their commercial character.
On the contrary, they seem easily separable.” The Guide even allegedly comes in
two parts, informational and ratings; the first could easily be published
separately. “[T]he Guide does not gain full First Amendment protection simply
because it includes a distinct summary of scientific ideas as a prelude to its
supposed product reviews.”

But was the Guide “intended to influence consumers to buy
the defendants’ goods,” as required by a remaining factor of the “commercial
advertising or promotion” test? The advertising was allegedly intended to help
Usana’s goods, not NutriSearch’s product. The parties didn’t brief the issue
and the district court didn’t rule on it, so the court of appeals remanded.
Though the dissent made good points on this element, the district court should
address it. “In considering this question, though, it may be useful to
determine whether the defendants and Usana had an agency relationship; for
example, it might be the case that the defendants were acting as agents of
Usana and therefore had a vested interest in the goods that Usana sold, which
might be enough to satisfy this element.” [Also, the false claims of neutrality
might well be helping sell the Guide, too.]

Final element: was the Guide allegedly sufficiently
disseminated to the relevant purchasing public? Sure. Ariix alleged that the
“professional edition [of the Guide] is specifically designed for and marketed
to tens of thousands of Usana sales representatives, who are told that
referring prospective customers to the guide is one of the most effective ways
to sell Usana products.” The district court mistakenly looked at whether
statements within the Guide were sufficiently disseminated.

The district court also found that Ariix didn’t sufficiently
allege misrepresentations; the court of appeals disagreed. The comparative
five-star ratings were non-actionable statements of opinion; even though the
Guide purported to rely on scientific and objective criteria, “there is an
inherently subjective element in deciding which scientific and objective
criteria to consider.” However, the disclaimer of independence was a factual,
falsifiable statement. And the failure to award Ariix a medal certification
presents specific and measurable statements about Ariix, given that it was allegedly
based on two falsifiable criteria: compliance with the FDA’s pharmaceutical
good manufacturing practices and certification of product labels’ claims from
an approved laboratory. “By not awarding Ariix a medal certification — despite
Ariix being eligible for such an award — the Guide falsely implies to consumers
that Ariix did not comply with the FDA’s GMPs or that it did not obtain the
appropriate laboratory certification.”

The district court wrongly found that compliance with the
GMPs wasn’t a statement of fact because consumers would merely “conclude that
perhaps a manufacturer did not follow practices that the FDA considered good.” But
whether Ariix followed those practices was itself a question of fact.

Judge Collins dissented.

First, he would not give any weight to allegations that
defendants falsely advertised the Guide itself, rather than Usana’s products.
But “advertisements that accurately reprint[] false claims contained in the
advertised works [are] protected from tort liability to the same degree as the
underlying works.” Anyway, Ariix didn’t plausibly plead that its injuries were proximately
caused by the advertising of the Guide, as opposed to the product reviews
contained in the Guide. [FWIW, I disagree: Independence is what makes such claims
more credible; consumers may discount claims made by a party with an economic
interest, which is why disclosure is so important to the FTC. Proximate cause
is an issue of legal causation, not a matter of counting steps in the chain.]

Rather than stretching the Lanham Act in ways that threaten
the First Amendment, the dissent would have relied on the remaining prongs of
the “commercial advertising or promotion” test. The dissent agreed with
everyone else that Lexmark abrogated the “competition” requirement in
older versions of the test. “Given that (1) a competitors-only limitation
similarly lacks any textual grounding in the phrase ‘commercial advertising or
promotion,’ (2) Gordon & Breach derived this atextual limitation
from its review of pre-Lexmark caselaw; and (3) Lexmark’s
emphatic rejection of a competitors-only limitation would be wholly undone by
continued adherence to this aspect of Gordon & Breach, the
conclusion is inescapable that Lexmark precludes limiting ‘commercial
advertising or promotion’ only to the commercial advertising and promotion of a
direct competitor.”

Lexmark left the sufficient dissemination requirement
intact; this was adequately pleaded.

What about “for the purpose of influencing consumers to buy
defendant’s goods or services”? This too

flows from the statutory language
and remains valid after Lexmark. By referring to representations that a
“person” makes “in commercial advertising or promotion,” the Lanham Act clearly
refers to commercial speech promoting sales of goods that may fairly be said to
be those of that “person,” i.e., the defendant. We do not normally think of
third-party product reviews or endorsements as being that person’s “commercial
advertising”—at least when they are not done on behalf of the product’s
manufacturer or seller.

That last qualification seems to be at issue here; also it’s
interesting that the dissent doesn’t discuss the nearby statutory language
making clear that statements in commercial advertising or promotion are
actionable if they “misrepresent[] the nature, characteristics, qualities, or
geographic origin of his or her or another person’s goods, services, or
commercial activities” (emphasis added). Even if, as the dissent says,
independent reviews are fully protected speech, that’s not the situation
alleged here, and the concerns governing the lesser protection for deceptive
commercial speech are clearly implicated.

The dissent recognized that the statute extends beyond
advertising by manufacturers and distributors themselves. “[W]hen an entity
acts as an agent of a manufacturer in making a product review, then that entity
acts on behalf of the manufacturer and is in that sense advertising its own
product. ‘[P]aid publicists’ speech’ about their payor’s products is commercial
speech.” Likewise “there may be other endorsers who have such a direct
financial stake in specific sales of a product—such as a cut of each sale—that
it may likewise be fair to say that they are thereby advertising their own
product.” But being cautious here avoids difficult constitutional questions. [It
is notable that those difficult questions have generally involved regulation of
truthful speech, like information about contraceptives; where the speech
is deceptive, there is less reason to be concerned for the free flow of
information.] The dissent thought that the majority created “a substantial
amount of uncertainty as to the scope of First Amendment protection for product
reviews, a result that I find doubtful and disquieting.”

The dissent would thus have concluded that Ariix failed to
plausibly plead that the statements promoted NutriChoice’s own products. The
complaint didn’t allege “Usana’s advance direction and control in preparing the
content of the Guide,” which might have sufficed. The dissent wanted Usana to
have changed or put “specific content” in the Guide—a standard that would
likely free many influencers from regulation. It wasn’t enough to allege that “Defendants
produced biased reviews in the craven hope that Usana would then act in ways
that were economically favorable to Defendants.” [That really seems like a
misdescription of the allegations—it might be a fair characterization if the
parties had never before interacted and the first contact was when MacWilliam
reached out to say “look how well I rated you!”]

The dissent thought that the allegations merely showed “that
Usana liked favorable reviews and that Usana promoted the Guide and its author
when the reviews were distinctly superlative and did not do so when they were
not…. That Defendants wrote obsequious reviews in the hope that Usana would be
pleased and buy more Guides or give MacWilliam speaking engagements does not
make them Usana’s agents in writing those reviews.” Sure, MacWilliam was
Usana’s agent when he did paid speaking tours expressly promoting Usana’s
products, but the complaint didn’t rest on that theory. [Surely it is relevant
to what MacWilliam was doing with the Guide, though.]

Nor was there anything else justifying the conclusion that Usana’s products were in any relevant sense NutriChoice’s
products, such as an entitlement to a cut of each sale, or other links to
profit if consumers chose particular supplements.

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Happy inauguration day to Redbubble in particular: 9th Cir. affirms functionality in Lettuce Turnip the Beet

Posted on January 20, 2021 by rtushnet

LLTB LLC v. Redbubble, Inc., No. 19-16464 (9th Cir. Jan. 20,
2021)

LTTB LLC sells t-shirts and other goods bearing its
registered trademarks, the words and design, “LETTUCE TURNIP THE BEET.” LTTB sued Redbubble for infringing by selling
products containing the same words and design. The district court granted
summary judgment in favor of Redbubble on grounds of aesthetic functionality/failure
to function. The court of appeals affirmed in a nonprecedential opinion,
holding (contrary to what INTA wanted) that Job’s Daughters is still
good law even though its “broad language was soon clarified and narrowed.”

Anyway, under Au-Tomotive Gold, the symbols here were
functional. Although “the t-shirts, tote bags, and other products bearing the
LTTB mark would still function as t- shirts and tote bags without the mark” and
use of the mark doesn’t alter the cost structure of production or add to the
[physical] quality of the products, but the question of aesthetic functionality
is whether the marks “perform some function such that the exclusive use of the
marks would put competitors at a significant non-reputation-related
disadvantage” (cleaned up).

Without explicitly interpreting what “significant” means
here, the court reasoned: “It cannot be disputed that competitors would be
unable to sell products bearing the phrase if LTTB’s marks were protected.” And
the Ninth Circuit disfavors monopolization of “a design feature which, in
itself and apart from its identification of source, improves the usefulness or
appeal of the object it adorns.” There was no evidence that consumers bought LTTB’s
goods because they identify LTTB as the source, rather than because of the
aesthetic function of the phrase, “LETTUCE TURNIP THE BEET.” LTTB’s evidence of
the popularity of its goods didn’t raise a triable issue on source
identification. Indeed, almost all of LTTB’s products bore the phrase “LETTUCE
TURNIP THE BEET” on them, “indicating that the phrase acts as an aesthetic
design, not as a symbol for the company.” Unlike high fashion brands, LTTB presented
no evidence “that consumers buy the goods because the design associates the
goods with the company LTTB rather than because they want goods bearing the
phrase.” Thus, it didn’t raise an issue of fact on aesthetic functionality.
[Although the court also doesn’t say anything about this, here the fact that no
evidence of secondary meaning was required to register the marks cuts against
LTTB: it was never required to develop such evidence, and the fact that a
symbol could be inherently distinctive if used in the right way doesn’t do
anything to rebut evidence that consumers are looking for the aesthetic effects
of displaying the symbol prominently on goods.]

LTTB’s registrations, and even incontestable registrations,
couldn’t overcome the defenses listed in statute, including “[t]hat the mark is
functional.” “Because, on this record and when used on the allegedly infringing
products that are the subject of LTTB”s complaint, LTTB’s marks are functional,
they are not protectable against any type of allegedly infringing activity.”

So, is the court actually recognizing pure defense-side functionality?
Sort of. Footnote: “[W]e do not hold that LTTB’s marks are per se invalid.”
Instead (?), the uses here—including on Redbubble’s website and in online
advertising—could not be infringing. But also: “Because LTTB’s mark is
functional and therefore not protectable on this record, there is no need to
address the issue of likelihood of confusion.” Nor did the district court err
in not addressing LTTB’s design marks separately; trademark isn’t supposed to
protect originality or creativity, but rather to protect source identification.
“Like the sweater designs in Wal-Mart, LTTB’s marks are primarily
aesthetic on this record, not source-identifying.” [This reiteration of “on
this record” is confusing. Is the court suggesting LTTB can try again if it
develops evidence as to front-of-product uses? Why? While there are a couple of
cases allowing terms that had distinctiveness, then became generic, to reclaim
that earlier distinctiveness, I’m not aware of cases allowing a once-functional
product feature to become nonfunctional.]

The district court also didn’t err in looking at the PTO’s
initial rejection of LTTB’s application on failure to function grounds; TrafFix
looked at the prosecution history of an expired patent in addressing trade dress
functionality.

We end with some vagueness about whether LTTB owns anything:

LTTB’s marks do not function as
trademarks because they are aesthetic only and do not identify the source of
the goods. The allegedly infringing activity does not deceive or mislead
consumers about the source of the goods but copies the designs themselves…. Because
functionality is a defense to the validity of the marks and to LTTB’s exclusive
right to use the marks, the district court properly granted summary judgment to
defendant Redbubble ….

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