Michael W. Carroll, Villanova University School of Law, What if the Section 512 safe harbors for online service providers had not been enacted?
If MAI is right, then all transitory copies implicate the reproduction right, creating an explosion of “copyright events” in the digital world. Section 512 limits monetary liability, not the copyright owner’s exclusive rights. Thus, the underlying theory of liability covered is not clear; implicitly, 512 accepts the broad scope of copyright law outlined in the NII White Paper. At the same time, taking the money out of the equation decreases the incentive to test liability theories. (Perhaps we’ll see that in the YouTube litigation.)
512 is a reminder that copyright doesn’t have to be a story of relentless expansion, at least if you have political muscle, even though 512 accepts the general breadth of copyright. Also it’s important that 512 was enacted pre-Napster, whose presence would have made 512 impossible.
Linking: does 512(d) make a difference? Not really; liability would rarely be appropriate anyway. But, without 512 there might have been more litigation clarifying that linking doesn’t exercise any rights, including display. Only secondary liability is appropriate, meaning a judicially enacted notice-and-takedown scheme. Might have had to clarify the Utah Lighthouse case that suggested that linking could infringe.
Core ISP functions: transmitting copies. Netcom had read in a volitional requirement to the reproduction right. 512(a) arguably overrules that, because it’s hard to see what 512(a) means if it doesn’t accept that there’d be infringement in the absence of 512(a). Litigation might have clarified that transmission copies are not “copies,” and Carroll thinks appellate courts would have followed Netcom. Without 512(a), though, there might have been issues with offshore pirate sites – ISPs might have been forced to cut them off.
System caching: A private ordering solution could have emerged leaving essentially the same terms.
512(c) is the one that made a big difference in exempting ISPs from monetary liability for user-directed storage. Storage isn’t one of the exclusive rights in the Copyright Act – so does this include display and distribution as well as reproduction? ISPs as hosts could have been sued for direct reproduction violations – unlike analog landlords, digital landlords own the machines that make the copies. This generated substantially greater uncertainty. Courts might have created a notice-and-takedown scheme through common-law rulemaking, but 512(c) played a big role in fostering web hosting.
In YouTube, we’ll hear from both sides that the other is breaking the “deal” agreed to in 512. Yahoo! and GeoCities were big lobbiers for 512(c), though, and they’re the precursors to MySpace, YouTube, etc. Notwithstanding Viacom’s claims, 512(c) is good for Hollywood – we’d probably still have video sharing, but much more ex ante filtering on legitimate sites. That would have given much more impetus to illegal peer-to-peer applications and led to a buildout of the underground video economy. Also, some of the videos are like fan fiction and should be tolerated uses.
Takeaway: 512 decreased uncertainty, but most ISP functions would still be performed in its absence. Social media would have been driven underground. We didn’t get as much litigation about important doctrinal questions, but the certainty may have been worth it.
Jon Garon, Hamline University School of Law, What if DRM fails?
Steve Jobs says Apple would embrace DRM-free music. Bruce Lehman has said that the DMCA didn’t work out very well, and predicts the rise of new patronage. Garon’s biases: Garon is a typical consumer who hates DRM, gets audiobooks from the library, and skips commercials by only watching DVRed content. At the same time, he’s a playwright and represents copyright owners. Garon agrees somewhat with Lehman, except that we don’t live in the benign world of Canadian government-funded cultural enrichment but a more commercial society.
His thesis: music is different. For music, DRM does more harm than good, ignoring ripped CDs and other sources of music. Only a few percent of music on iPods has DRM. Jobs is right that abandoning DRM would leave the music industry just fine.
But short stories are different – all reasonably sized copyrighted sf stories are available for free on the internet. (I’d love to see the proof of this. It is not my experience, though I admit I have not searched for pirate Frederik Pohl sites.) Big novels are too bulky to read online, but the short story market has collapsed. People are reading a lot less literature. (Is that because of piracy? How could that be so? Are the pirates not reading, just pirating? More importantly for copyright, are people spending less time amd money overall consuming creative works, whether literature or video games? My guess is not.) Commercial publishers can’t afford to take as many risks as they used to. Likewise, theater and independent film are economically unsustainable. Only very short clips are profitable online.
Who will be the new patrons? Consumers. Advertisers, shifting from wraparound to embedded content. Private patrons donating to museums etc.; are these healthy – do we want all theater, all publishing, all opera to follow that elitist model? (Um, what are the chances that, no matter how robust IP rights and DRM, there would be a non-elite-supported opera company? Garon doesn’t seem happy with current tastes in entertainment, but I find it difficult to connect that with lax IP enforcement.) Manufacturers and distributors – Steve Jobs may want to support content to have things to fill his devices.
We can’t follow music. Music is atomized; the album never really worked. We need to get over the failure of DRM for music delivery. If we’re in a world where we can’t fund film or publishing or video games and need to rely on volunteers, technology will just create an ever-greater wasteland.
Michael Landau, Georgia State University College of Law, What if the anti-bootlegging statutes really are upheld under the Commerce Clause?
Martignon in SDNY has been on appeal (for years!) to the Second Circuit. What if the Second Circuit reverses? If you accept that unfixed works and other uncopyrightable works can be protected under the Commerce Clause because they are outside the scope of the Copyright Clause, will it render copyright superfluous? Will it revitalize the database protection attempt? What about the trademark-copyright interface? If you can protect bootlegs forever, maybe you can also protect Mickey Mouse forever.
Also, what if the Second Circuit affirms? Would Congress attempt to fix the hole? If you can fix a sports event simultaneously with its transmission, why not provide that a performance fixed without the performer’s consent is still considered fixed, and to belong to the performer? Why hasn’t Congress done this already, given the uncertainty?
Mary Wong, Franklin Pierce Law Center, What if the WIPO Development Agenda is adopted?
WIPO has been criticized for facilitating the ratcheting up of IP, and for focusing on the alleged economic benefits of high IP protection even though there is no consensus on whether IPRs lead to economic development and social benefits. One size fits all may not be the right solution.
There is increasing involvement in IP issues by NGOs and civil society groups, as well as a recognition of the link between IPRs and human rights. The 2006 Consumers’ International Study on Copyright & A2K on 11 developing countries in Asia found that none of the countries had taken advantage of existing flexibilities in international treaties; generally, they provide greater rights protection than required. Now this issue is part of the development and human rights agenda, providing a perspective from which to decide when there should be limits on IP rights. At this point, even if formal proposals aren’t adopted, there is greater awareness of the development dimension as it relates to already-available limitations and exceptions to copyright, and new interest groups have realized that they need to be at the table.
Q: If the Federal Circuit were in charge of copyright law, would Carroll be so sanguine about the world in the absence of 512?
Carroll: No, because copyright is a common-law field – at least in the 9th and 2nd circuits – and the Federal Circuit lacks the experience and the temperament for that. At that point, probably the parties would have run to Congress.
Lemley: And yet, the Federal Circuit’s take on anticircumvention has been most aggressive in twisting the statute to get the right result.
Bartow, for Garon: Billy Joel sold out South Carolina’s stadium with $80 tickets; Mamma Mia also sold out; local bands sold out. People are spending money on entertainment, just differently. Lucy smoked cigarettes on I Love Lucy. Have things changed that much?
Garon: The cigarette ads were banned. But advertisers have been trying to cheat with product placement from the beginning. The difference is that now we embrace what we used to think was evil and pernicious. Live entertainment continues to matter to us; and music is sui generis in having live performance as an independent revenue stream and having the ability to use branded merchandise as an adjunct as most other art forms can’t. He’s not worried about music. Mamma Mia is a trademark-based content show. The number of Broadway shows that aren’t subsidized are fewer and fewer; but the content is very different from the content in London, which relies less on branding strategies. Some of the differences go to the heart of what kind of society we want to have.
Q for Landau: What implications does Martignon have for a federal right of publicity statute?
A: We need such a statute to avoid problems of copyright preemption. With the exception of name, almost all of the uses for a right of publicity are in copyright’s subject matter, so you could even do it as part of the Copyright Act. But an adjunct to TM law is more likely.
Q: We’d still have a constitutional preemption issue, though.
A: But it would solve state-level differences.
Q for Wong: How do the bilateral TRIPs-plus agreements we’ve been signing affect the WIPO discussions?
A: That’s a key issue for future work, and the next step for the development agenda. (Indeed, we seem to be turning to bilateral agreements precisely because they enable us to leave behind all the new groups that have shown up at the multilateral table.)
Q for Landau: Isn’t the “limited times” for bootlegs the statute of limitations, at least for the person who created the bootleg? That doesn’t help with trafficking, of course.
A: The real harm is the distribution/transmission. Also, if it’s outside the Copyright Clause, nothing prevents perpetual protection. This has an easy statutory fix. Broader question: if the live performance right is eliminated, what about the §106(4) public performance right? The answer there is that the initial work is fixed – but we could say that about the bootleg too.
Q for Carroll: Was section 230 of the CDA a predecessor of 512?
A: Only indirectly. The ISPs were caught in the middle for a lot of forms of liability, but they knew they needed a different deal with the copyright industries than they could get with the plaintiff’s bar, which was their only opposition for 230. Congress was primed for the argument that some new rule was required for these new intermediaries, but mostly Congress just wanted the parties to go do a deal. An interesting issue is 512’s international modeling effects.
Seltzer: Why haven’t we seen more litigation under 512(f) from people harmed by defective notices?
Carroll: Because there’s not enough money in these disputes now that the ISPs are out of it. Other than law professors who want to make a point, most people move on.
Q for Garon: What would be evidence of DRM’s success?
A: It may have already failed. To shift to DRM2, we need the industry to concede the point on music and give up on a one-size-fits-all approach. We need to convince people that film and TV are socially acceptable categories for DRM-protected works. We do condemn people who download thousand-dollar software in ways we don’t condemn music downloaders.
Q: Product placement produces a revenue stream whether or not DRM succeeds. Why won’t we get both?
A: Distributors will look to maximize revenue streams, but artists will balance their individual visions with their commercial needs. A world in which product placement is unnecessary will maintain some space for non-product-placement-based art.
Q: Isn’t it possible that some media are just on their way out?
A: Theater has been declared dead since well before these debates began. What we’ve seen in theater is a change in patronage to large donors. The result: an increased separation between what the general public wants and what the funders are willing to pay for. Mamma Mia is a rock opera, not Les Miz or Andrew Lloyd Webber. The content follows the money.
Q: Artists start out with no money; they’re taking a chance on success, and won’t they continue to do so?
A: Yet people respond to economic incentives to stay in the game – most people give up after 2-3 creative works that don’t find a place in the market. There will always be volunteers, but professionals won’t work if they can’t feed their kids. (And yet DRM just doesn’t seem that helpful to ensure that those kids get fed. Piracy isn’t the problem; the problem, if it is one, is that most people can’t write or sing or draw well enough to make a living doing it.)
Distributors want to maximize eyeballs. There is less and less narrative in film, more violence and explosions. (So if DRM favors distributors over initial authors, as it seems to, I’m not sure how Garon’s prescription treats the disease he sees.) The WPA created an incredible flourishing of US theater – patronage does wax and wane. Historically, though, copyright has contributed greatly to the richness of culture, and he’s worried about that segment.
Q: SF hasn’t died; lots has shifted to graphic novels. TV is better than it’s ever been, even if movies aren’t as good. We’re seeing changes in how talent is deployed, not the collapse of culture.
A: He hopes he’s wrong. But when a 2-hour download takes 2 minutes on your broadband connection, then the collapse will hit.
Saturday, March 31, 2007
What Ifs? Keynote storyteller
Mark A. Lemley, Stanford, Ignoring Patents
2.5 million patents have issued in the last 20 years, over 1/3 of the total number issued in US history. Many are in the information industries. And these are component industries: to make and sell things, you have to put together a bunch of components. The patents generate royalty stacking and holdup concerns, not just in theory but in practice. Microsoft owes 1.2 billion for one invention used in Windows, $500 million for another. Then add in willful infringement and treble damages, as well as the outrageous cost of patent litigation -- $4.5 million to pay your lawyers, win or lose.
And yet – the anticommons hasn’t disabled any of these industries. People are running their businesses notwithstanding the patent shadow.
Why? Because people ignore patents all the time, especially in component industries. This may not be true in the pharmaceutical industry, but he’ll talk about that in a bit.
Scientists, engineers, software writers don’t read patents to gather information. Even if they thought it was a good idea, the business and legal types are telling engineers: whatever you do, don’t read patents. Don’t put us on notice.
Similarly, companies don’t engage in prior art searches before filing for patents or before making products. Not surprisingly, once that happens, they get threat letters. The received wisdom in Silicon Valley is that you always ignore the first threat letter you get. Sometimes they go away. Only if they’re serious do you start evaluating.
When you’re sued for patent infringement, you never stop making the product pending the outcome of the litigation. You always roll the dice, even if you’re also trying to design around the patent just in case. The Blackberry is an example of this, settling for $613 million rather than implementing a workaround.
What if we took seriously the idea that patents are just like real property? Nobody would build a house without being sure they owned the land. If it were a shopping mall and needed to aggregate land to create it, you wouldn’t start building in the hopes that you wouldn’t get sued or the plaintiff would turn out to have a defect in title. Even if you did, no one would loan you the money to do so. In real property, we’ve got to be sure, at least to a high degree of certainty.
Analogously, Intel couldn’t design a new chip until it had cleared all the possible rights. You’d need patent title insurers who’d spring up to clear the rights. In the university setting, scientists would investigate patents before starting research.
Lemley thinks this would be a disaster. The benefits: patent owners would get paid more. The subset of patent owners in competition with accused infringers, and who want to use patents to exclude competitors, would benefit tremendously. Filing a lawsuit would deter people from entering the market.
Research and product sales would be delayed by years, even decades, in every industry. Cost would be the least of the problems – patent applications may be sought, or may have claims that differ when they’re issued. And because of continuations, you can’t identify all the claims until 20 years after the filing date. Even once you’ve identified a patent owner, you don’t know what the patent covers. 46% of patents litigated to judgment are ultimately held invalid. Given the 40% reversal rate on Markman hearings, you don’t know what a patent means until after Federal Circuit review. And there are many, many patents out there. Third-generation wireless – one bit of your cellphone – is covered by nearly 7000 “essential” (self-identified) patents.
This is more than a problem of layering. If I must buy and aggregate rights from a bunch of people, we can’t expect those individuals will set an efficient systemwide price. If one voluntarily reduces price, others will charge more and they’ll be the suckers. This creates a real risk of bargaining breakdown. The real property rule presupposes the absence of bargaining breakdown.
Systemic problems: consumers would lose the benefits of competition, in situations where the patent would be held invalid or not infringed. And patentees only win 25% of their litigated cases – 75% of the time you’re sued, you’re right to refuse to pay. And that helps consumers get the benefit of the product during the period when the patent’s validity and scope are uncertain. Competitors and innovators generally would lose the benefits of going ahead without waiting for approval from patent owners. Design-around efforts would wither. If competition is a better spur to innovation than monopoly, then we’d lose out in innovation as well.
In the pharmaceutical industry, we have a world in which patent owners all neatly list their patents in one place, the Orange Book. The FDA and Hatch-Waxman rules restrict generic entry when there is an Orange Book entry. If you certify that you don’t infringe or the patent is invalid, the patent owner can sue you and get an automatic 30-month injunction. Even after those expire, as they’ve started to do, generic companies are mostly afraid to enter at risk. They act like real property owners.
Does this system work? Pharma is different – Lemley thinks we need stronger patent rights because of the cost and delay of the regulatory environment needed to guarantee safe and efficient drugs. So the benefits are a lot stronger in pharma. Correspondingly, the cumulative innovation that drives software and semiconductors is a lot less important. Discovering a new blockbuster is correspondingly more valuable than improving on the dosage system of that blockbuster. Moreover, there are fewer patents – by orders of magnitude – in the industry, and the claims are a lot clearer. Chemical patents don’t have huge Markman problems the way other patents do, for example when they specify the high-level functional characteristics of a computer program.
Nonetheless, there are problems even in pharma: Evergreening – listing as many patents as possible on the Orange Book, even if they’re obviously bogus or unrelated to the underlying drug. Product-hopping to game the FDA approval system – changing products just as a generic is about to enter the market. Exclusion payments: paying generic competitors to stay out. The result is surprisingly little generic entry while patents are in force and even a number of years after the original patent expires.
Second what-if: What if we wanted to create a robust market for patent license, which wasn’t the current “ignore patents” world but also wasn’t the sclerotic world of land rights? That would require really radical changes to solve the problem of uncertainty early on in the development process. Requirements: much better review of applications, which would have costs of its own; early publication, possibly on the date of application; ban continuations; allow post-grant oppositions; other mechanisms for collecting information before a lawsuit began; a prior user or independent invention defense, since we shouldn’t make people buy rights for things they’ve already invented, or at least change the rules for willfulness when people look at patents; and change remedies to limit the holdup problem – ban injunctions and make royalties reasonable in line with the actual technical contribution of the patent. Only in those circumstances should you make people enter into search and negotiations before they developed new products.
My Q: This sounds like the trademark system, except for the prior user part and the remedies.
Lemley: Yes, it sounds similar, but the market for patents he’s interested in imagining would be fundamentally different – he doesn’t want a market for licensing trademarks because that would cause consumer confusion. (Though Lemley doesn’t believe in licensing rights for TMs generally, at least not for communicative/secondary products.)
Q: What about penalties for wrongly putting a patent in the Orange Book?
A: We might see fewer evergreening problems.
Q: Are there industries in the middle ground between IT and pharma?
A: We need more research! Biotech may be different from classic chemicals, though his guess is that it’s close because of the FDA regulatory background.
Q: Would more third-party involvement help?
A: Interpleader might be helpful – if we could bring all the patent owners together, that might help solve problems and make clear that a single inventor’s claim for “just 1%” of royalties would quickly make a product like a cellphone noneconomic. The difficulty would be patent applications in the pipeline.
Q: When you sit down to create something artistic, you ignore copyright because you assume you’re making an independent creation (wow, this questioner’s experience of creation is very different from mine), so copyright is a good comparison for ignoring patents. In a world with a de facto independent invention defense, do we get all the results you want? Can you have a property right with injunctive remedies and still do well for efficiency?
A: He’s not necessarily advocating independent invention as a defense. Rather, if you wanted to move to a market model, this would be one of the requirements. Copying is difficult to prove or disprove. With copyright, we can usually distinguish between people who copied, though they say they didn’t, and people who didn’t copy. That’s much harder when it comes to a DNA sequence or other more basic concept, like a cheese slicer with a wire that works with a slicer. (I’m not convinced by Lemley’s distinction – the rule works pretty badly in music copyright, especially given that copyright recognizes “unconscious copying” as sufficient.)
Q: What about the potential that people are both plaintiffs and defendants?
A: True for the big guys, who don’t sue each other – enter into cross-licensing or just leave each other alone on a mutually assured destruction theory. Non-practicing entities (e.g., patent trolls) have nothing to lose from Intel’s 10,000 patents. They account for a substantial number of the cases that are actually filed.
Q: Would liability rules mean people would still ignore patents?
A: It’s a system design question. We could still create incentives for people to do deals outside the legal system instead of inside. But perhaps patent challenges are undersupplied – a property system could heighten this problem. If we really had a market system, he’d want a search obligation and an obligation of entering into good-faith negotiations. If you don’t do that, you should pay penalties, but if you do, you should be able to take your chances if you conclude that the patent is invalid or the price too high and not be penalized.
Q: Are patents for outsiders worth it?
A: Intel and others might tell you that they’d be happy with unilateral patent disarmament. But patents might still encourage innovation by people who can’t get into the market, e.g., for chip design. The problem now is that the legitimate small-inventor patent gets lumped in with the general “ignore patents” trend. Also, major companies get a return from innovation because their patent portfolios entitle them to participate in industry oligopolies – though that might not be necessary.
Q: This is a caricature of property law. Every issue beyond 7-8 core cases involves substantial indeterminacy within property law. Everything from adverse possession to easements to equitable servitudes – you don’t know what the answer is until the judge rules. When you step outside the commercial context, indivdual landowners are less likely to review all necessary rights – banks give conditional loans even when people discover easements on their lands. Trespass may be determinate, but not the rest of the property law.
A: Agrees that there is indeterminacy; this is why we can spend a year teaching property. But there is not the same level of indeterminacy in the average real property case. It’s not the case that 46% of real property deeds are invalidated. It’s not the case that people always fight over the boundaries of real property, as they do in every case after Markman. Add to that the hundreds to thousands of potential claimants in patent, which is unusual in real property. It’s true that individuals don’t read their title insurance or loan documents. But the banks generally do, and that’s why there’s title insurance.
2.5 million patents have issued in the last 20 years, over 1/3 of the total number issued in US history. Many are in the information industries. And these are component industries: to make and sell things, you have to put together a bunch of components. The patents generate royalty stacking and holdup concerns, not just in theory but in practice. Microsoft owes 1.2 billion for one invention used in Windows, $500 million for another. Then add in willful infringement and treble damages, as well as the outrageous cost of patent litigation -- $4.5 million to pay your lawyers, win or lose.
And yet – the anticommons hasn’t disabled any of these industries. People are running their businesses notwithstanding the patent shadow.
Why? Because people ignore patents all the time, especially in component industries. This may not be true in the pharmaceutical industry, but he’ll talk about that in a bit.
Scientists, engineers, software writers don’t read patents to gather information. Even if they thought it was a good idea, the business and legal types are telling engineers: whatever you do, don’t read patents. Don’t put us on notice.
Similarly, companies don’t engage in prior art searches before filing for patents or before making products. Not surprisingly, once that happens, they get threat letters. The received wisdom in Silicon Valley is that you always ignore the first threat letter you get. Sometimes they go away. Only if they’re serious do you start evaluating.
When you’re sued for patent infringement, you never stop making the product pending the outcome of the litigation. You always roll the dice, even if you’re also trying to design around the patent just in case. The Blackberry is an example of this, settling for $613 million rather than implementing a workaround.
What if we took seriously the idea that patents are just like real property? Nobody would build a house without being sure they owned the land. If it were a shopping mall and needed to aggregate land to create it, you wouldn’t start building in the hopes that you wouldn’t get sued or the plaintiff would turn out to have a defect in title. Even if you did, no one would loan you the money to do so. In real property, we’ve got to be sure, at least to a high degree of certainty.
Analogously, Intel couldn’t design a new chip until it had cleared all the possible rights. You’d need patent title insurers who’d spring up to clear the rights. In the university setting, scientists would investigate patents before starting research.
Lemley thinks this would be a disaster. The benefits: patent owners would get paid more. The subset of patent owners in competition with accused infringers, and who want to use patents to exclude competitors, would benefit tremendously. Filing a lawsuit would deter people from entering the market.
Research and product sales would be delayed by years, even decades, in every industry. Cost would be the least of the problems – patent applications may be sought, or may have claims that differ when they’re issued. And because of continuations, you can’t identify all the claims until 20 years after the filing date. Even once you’ve identified a patent owner, you don’t know what the patent covers. 46% of patents litigated to judgment are ultimately held invalid. Given the 40% reversal rate on Markman hearings, you don’t know what a patent means until after Federal Circuit review. And there are many, many patents out there. Third-generation wireless – one bit of your cellphone – is covered by nearly 7000 “essential” (self-identified) patents.
This is more than a problem of layering. If I must buy and aggregate rights from a bunch of people, we can’t expect those individuals will set an efficient systemwide price. If one voluntarily reduces price, others will charge more and they’ll be the suckers. This creates a real risk of bargaining breakdown. The real property rule presupposes the absence of bargaining breakdown.
Systemic problems: consumers would lose the benefits of competition, in situations where the patent would be held invalid or not infringed. And patentees only win 25% of their litigated cases – 75% of the time you’re sued, you’re right to refuse to pay. And that helps consumers get the benefit of the product during the period when the patent’s validity and scope are uncertain. Competitors and innovators generally would lose the benefits of going ahead without waiting for approval from patent owners. Design-around efforts would wither. If competition is a better spur to innovation than monopoly, then we’d lose out in innovation as well.
In the pharmaceutical industry, we have a world in which patent owners all neatly list their patents in one place, the Orange Book. The FDA and Hatch-Waxman rules restrict generic entry when there is an Orange Book entry. If you certify that you don’t infringe or the patent is invalid, the patent owner can sue you and get an automatic 30-month injunction. Even after those expire, as they’ve started to do, generic companies are mostly afraid to enter at risk. They act like real property owners.
Does this system work? Pharma is different – Lemley thinks we need stronger patent rights because of the cost and delay of the regulatory environment needed to guarantee safe and efficient drugs. So the benefits are a lot stronger in pharma. Correspondingly, the cumulative innovation that drives software and semiconductors is a lot less important. Discovering a new blockbuster is correspondingly more valuable than improving on the dosage system of that blockbuster. Moreover, there are fewer patents – by orders of magnitude – in the industry, and the claims are a lot clearer. Chemical patents don’t have huge Markman problems the way other patents do, for example when they specify the high-level functional characteristics of a computer program.
Nonetheless, there are problems even in pharma: Evergreening – listing as many patents as possible on the Orange Book, even if they’re obviously bogus or unrelated to the underlying drug. Product-hopping to game the FDA approval system – changing products just as a generic is about to enter the market. Exclusion payments: paying generic competitors to stay out. The result is surprisingly little generic entry while patents are in force and even a number of years after the original patent expires.
Second what-if: What if we wanted to create a robust market for patent license, which wasn’t the current “ignore patents” world but also wasn’t the sclerotic world of land rights? That would require really radical changes to solve the problem of uncertainty early on in the development process. Requirements: much better review of applications, which would have costs of its own; early publication, possibly on the date of application; ban continuations; allow post-grant oppositions; other mechanisms for collecting information before a lawsuit began; a prior user or independent invention defense, since we shouldn’t make people buy rights for things they’ve already invented, or at least change the rules for willfulness when people look at patents; and change remedies to limit the holdup problem – ban injunctions and make royalties reasonable in line with the actual technical contribution of the patent. Only in those circumstances should you make people enter into search and negotiations before they developed new products.
My Q: This sounds like the trademark system, except for the prior user part and the remedies.
Lemley: Yes, it sounds similar, but the market for patents he’s interested in imagining would be fundamentally different – he doesn’t want a market for licensing trademarks because that would cause consumer confusion. (Though Lemley doesn’t believe in licensing rights for TMs generally, at least not for communicative/secondary products.)
Q: What about penalties for wrongly putting a patent in the Orange Book?
A: We might see fewer evergreening problems.
Q: Are there industries in the middle ground between IT and pharma?
A: We need more research! Biotech may be different from classic chemicals, though his guess is that it’s close because of the FDA regulatory background.
Q: Would more third-party involvement help?
A: Interpleader might be helpful – if we could bring all the patent owners together, that might help solve problems and make clear that a single inventor’s claim for “just 1%” of royalties would quickly make a product like a cellphone noneconomic. The difficulty would be patent applications in the pipeline.
Q: When you sit down to create something artistic, you ignore copyright because you assume you’re making an independent creation (wow, this questioner’s experience of creation is very different from mine), so copyright is a good comparison for ignoring patents. In a world with a de facto independent invention defense, do we get all the results you want? Can you have a property right with injunctive remedies and still do well for efficiency?
A: He’s not necessarily advocating independent invention as a defense. Rather, if you wanted to move to a market model, this would be one of the requirements. Copying is difficult to prove or disprove. With copyright, we can usually distinguish between people who copied, though they say they didn’t, and people who didn’t copy. That’s much harder when it comes to a DNA sequence or other more basic concept, like a cheese slicer with a wire that works with a slicer. (I’m not convinced by Lemley’s distinction – the rule works pretty badly in music copyright, especially given that copyright recognizes “unconscious copying” as sufficient.)
Q: What about the potential that people are both plaintiffs and defendants?
A: True for the big guys, who don’t sue each other – enter into cross-licensing or just leave each other alone on a mutually assured destruction theory. Non-practicing entities (e.g., patent trolls) have nothing to lose from Intel’s 10,000 patents. They account for a substantial number of the cases that are actually filed.
Q: Would liability rules mean people would still ignore patents?
A: It’s a system design question. We could still create incentives for people to do deals outside the legal system instead of inside. But perhaps patent challenges are undersupplied – a property system could heighten this problem. If we really had a market system, he’d want a search obligation and an obligation of entering into good-faith negotiations. If you don’t do that, you should pay penalties, but if you do, you should be able to take your chances if you conclude that the patent is invalid or the price too high and not be penalized.
Q: Are patents for outsiders worth it?
A: Intel and others might tell you that they’d be happy with unilateral patent disarmament. But patents might still encourage innovation by people who can’t get into the market, e.g., for chip design. The problem now is that the legitimate small-inventor patent gets lumped in with the general “ignore patents” trend. Also, major companies get a return from innovation because their patent portfolios entitle them to participate in industry oligopolies – though that might not be necessary.
Q: This is a caricature of property law. Every issue beyond 7-8 core cases involves substantial indeterminacy within property law. Everything from adverse possession to easements to equitable servitudes – you don’t know what the answer is until the judge rules. When you step outside the commercial context, indivdual landowners are less likely to review all necessary rights – banks give conditional loans even when people discover easements on their lands. Trespass may be determinate, but not the rest of the property law.
A: Agrees that there is indeterminacy; this is why we can spend a year teaching property. But there is not the same level of indeterminacy in the average real property case. It’s not the case that 46% of real property deeds are invalidated. It’s not the case that people always fight over the boundaries of real property, as they do in every case after Markman. Add to that the hundreds to thousands of potential claimants in patent, which is unusual in real property. It’s true that individuals don’t read their title insurance or loan documents. But the banks generally do, and that’s why there’s title insurance.
What Ifs? Patents
Patent Law
Timothy R. Holbrook, Chicago-Kent College of Law, What if patents and patent applications weren't published until they expired?
We think of patent disclosure as a fairness obligation. But getting claims of infringement out of the blue isn’t that surprising even in a publication system – so what function is really served by publication? It’s supposed to teach how to make or perform the subject of the patent. But there are a lot of incentives not to look at patents, or even applications, such as the possibility of willful infringement.
Also, the information disclosed by a patent application may not be very good – 18 months may be a very long time in a tech-intensive industry. Moreover, the content may not really help you out. Even if you do read the patent, you can’t do much with it during the patent term, given the lack of a robust experimental use exception.
The patent might not afford real public notice of its existence, but once you see it you may have an idea of the scope of the claim. But that assumes awareness of the patent.
The alternative would be more like a trade secret regime. Independent invention is a defense against trade secret, of course, so you may have more notice of what you can’t do under a trade secret regime. And in a world without publication, the assertion of a patent claim would put others on notice – you’d lose some of your trade secret-like protection by asserting infringement.
What about the available defenses? Other unexpired patents wouldn’t be available as recent prior art. But patents may not be the best source of prior art, especially with new tech or new subject matter – people complain that the PTO is too patent-dependent. But patents are a network, and you can look at how they cite each other. The use of the patent system as an index to find other patents is an oft-overlooked benefit of publication.
Insight: need to create incentives for applicants to include greater non-patent-based prior art, to improve the utility of this patent network.
It’s not as if the PTO does a great job right now. So what about hidden patents? There does seem to be some public oversight, e.g. when the peanut butter and jelly sandwich patent issued. Delayed transparency would be a harm. Thus, disclosure isn’t necessarily serving a fairness or quid pro quo objective, but actually helping to improve initial patent quality.
Michael J. Meurer, Boston University School of Law, What if economists ran the patent office?
What do economists think of patents as property? The majority of industrial organization economists today tend to think of the patent system as regulatory and closely connected to competition policy, rather than as property.
The FCC has succeeded by using economists to run sophisticated and successful auctions of spectrum. The economists pushed for an auction and thought very carefully about how to pick the right kind of auction given the circumstances (bidders’ valuations are likely to be correlated, which has complicated effects; collusion is possible). So maybe there’s room for improvement in patent.
The methodology is mechanism design: the state of the art in microeconomics. You structure rules of the game to elicit private information held by the people subject to regulation. Lemley and others have looked for mechanisms to add to the patent system, such as gold-plated and regular patents. That would elicit information from applicants about commercial appeal of a specific technology and the robustness of the overall field.
An economist would also want to experiment with – drastically increase – renewal fees.
The PTO has been hostile to academic economists, unlike other agencies, because it understands that economists are a threat to its way of life. The PTO’s customer service orientation helps applicants, but is the wrong structure overall. The examiner or the applicant needs to parse claim language. We need to divide the examiner’s time between different statutory issues, possibly differing depending on the technology. We need to consider whether to require a second pair of eyes in certain circumstances. Economists could help figure out what incentives to give examiners to spend their time most efficiently.
Joseph Scott Miller, Lewis and Clark Law School, What if Joe Meigs had written the nonobviousness statute?
Subtitle: How the perfect murdered the good in 1948. The issue is error detection – the PTO can make false positive and false negative errors. Miller’s gut feeling is that false positives are worse (in patent) than false negatives. Section 103(a) is a very thin operationalization of nonobviousness – it includes a timeframe (at the time the invention was made) and an audience (PHOSITA), and says that dumb luck is okay as a source of invention, but that’s about it.
In 1909, the Supreme Court says that, if skilled people have failed after repeated effots to discover a new and useful improvement, then the person who makes the discovery is entitled to protection as an inventor. This is a concrete and recognizable way of surpassing ordinary skill in the art. Judge Hand points out that we shouldn’t rely on novices, who are dumb in a dangerous way – a novice may find nothing but the obvious in a combination that hasn’t been discovered for a decade after the need arose. The best test of what persons of ordinary skill can do is what they have done. Know your history in the technology and you can evaluate obviousness! But the Supreme Court overturned Hand’s decision upholding a patent for a cordless automatic lighter for a car.
Rejected heresies: the requirement of a flash of genius. The synergism requirement – illustrated by a case involving the modern checkout counter – space for one customer to unload while the previous customer was being checked out. The 6th Circuit said that a long-existing problem born in 1917 was never solved until 1937, thus justifying patent protection, but the Supreme Court reversed and struck down the patent because “two and two have been added together and still they make only four.” The patent bar demanded that the standard be fixed to eliminate both the flash of genius and the synergism.
Giles Rich felt that a positive statement about patentability was dangerous as possibly restriction; though he didn’t want judges to indulge personal standards, he wanted the ability to make patentability arguments to help his clients. Likewise, another drafter said that § 103 had no standard; it was a requirement with no implementing guidelines.
Joseph Meigs was a chemist who died in 1959, the named inventor on 22 patents, 18 as sole inventor. He was also a patent lawyer. Meigs proposed a patent statute that made nonobviousness a question of fact, and that said that sufficient proof of nonobviousness could come from (a) filling a long-felt want, and (b) prior to the invention, the skill of the hard had not supplied, and could not supply, that want. It’s a thick description, but it’s not exclusive.
Meigs was not politically connected; he testified on his own behalf. The biggest question: at what level of granularity do you need to state the “want” at issue? Giles Rich testified against the bill as too rigid, and might incline courts away from sustaining patents where there was no long-felt want. This is absolutely true: it would make more false negatives than §103. But it would make fewer false positives.
In practice Meigs’ standard is useful for litigators – if they can show trial and failure, they are likely to succeed in showing nonobviousness. Putting it in the statute would signal better to inventors where they should work to get protection. It would also encourage them to defy conventional wisdom in the art. The analysis wouldn’t be hindsight-prone. And it would put today’s evidence into stronger narratives – the art taught away from the invention, the invention was greeted with surprise and skepticism. It would also reanimate multiple invention as a contraindicator to patentability, a doctrine that has now died on the vine.
Katherine J. Strandburg, DePaul University College of Law, What if we relied on user innovation to produce business methods and did away with business method patents?
Some people invent things to use (not sell) them. User innovators are less likely to need patents.
Business methods are often user innovations – administrative or “back-office” methods, such as keeping accounts, inventory tracing, payment processing. They’re often tailored to specific business contexts and embodied in software. They’re sometimes purchased through consulting services or individualized software. They tend to be non-self-disclosing in use, which means they can be kept as trade secrets by user innovators.
A different category is products sold to consumers: hub-and-spoke mutual funds, online gambling, long-distance packages, Netflix, iTunes, services like massages, surgery, piano lessons – not user innovation; often self-disclosing as sold.
A third category, customer service methods, somewhere in the middle: one-click purchasing, method for internet payment, method for advertising. Very often these are user innovation, but self-disclosing in use unlike the back-office innovations.
Greater intrinsic rewards: efficient business practices are their own reward, and create a first mover advantage including customer switching costs. Business methods also meet heterogeneous needs and provide customized solutions. Some business methods are skill-based and inventors do them better. User innovators may have lower invention costs, since innovation is a side effect of use rather than the product of a research program.
User innovators are also less likely to use patents to disseminate their inventions. When use gives a competitive advantage, the user wants to avoid others having embodiments of the invention like one-click purchasing. But seller innovators want to disseminate their inventions to customers. Thus user innovators tend to use patents to restrict others’ use.
User innovators therefore make systematically different inventions and engage in systematically different patent behaviors. If there are these differences in responses to patent’s incentives, can we tailor patent doctrine to recognize that user innovation is different? One possibility: a broad exception for use as a business method, like a research use exception. There would then be no need to determine ahead of time whether something is a business method patent. Linedrawing would be easier in context, and there would be no defense for competing sales of the patented product.
For back office methods, sellers would be protected from competitors by patenting and from users by copyright, know-how, and difficult-to-implement methods. Users would gain the benefit of either earlier disclosure or earlier nonexclusivity.
For products, sellers would be protected from competitors by patenting, and from users by make v. buy tradeoffs.
Finally, customer service methods: if it’s non-self-disclosing, a use exemption would promote trade secrecy. If it’s self-disclosing, competitors will copy the method. The desirability of this effect depends on the extent to which inventive costs (often low) are balanced by first mover advantages, switching costs, etc. (often high).
Bottom line: an exception would address concerns about exclusive control of basic tools of eocnomic competition, similar to concerns about patents on research methods. It would tend to neutralize patents on “trivial” business methods, which are least likely to need patent incentives. Costs: more reliance on trade secrets.
Greg Vetter, University of Houston Law Center, What if the GPL had been patented?
The GPL is a business method of licensing software. Vetter claims it’s useful, novel, and nonobvious. There would be very interesting issues of equivalents (e.g. to the viral elements of the license) and other infringement questions.
New issue: dual licensing, which allows a choice of GPL or proprietary terms. That wouldn’t be possible if the GPL were patented. People have also adjusted the GPL to make exceptions, for example in the Linux kernel – application programs that run on the kernel don’t have to be GPL. Netscape released Mozilla as open source, under a “weak” copyleft – you could make changes to files but would have to apply GPL terms within those files. The exclusion of these possibilities could have had dramatic effects on FOSS.
Still, the hypothetical GPL patent enforcement possibility wouldn’t seriously diminish FOSS’s potential. There are other licensing modes, such as BSD-style licenses. There are synergistic effects of having code out there and available even if it’s not pure GPL. Also, there’s been notable pragmatism in updating the GPL v.3. There are issues about license proliferation – patent control could have limited such proliferation, assuming (as is likely) that the owner, Richard Stallman, would have licensed the licensing method to everyone.
Some software patents now address open source – Microsoft has a patent application for isolating the licensing layer of software, and another company has a patent application for looking for FOSS license terms in software. So this isn’t an impossible hypothetical, despite the incongruity of imagining Stallman with a patent.
Elizabeth I. Winston, Columbus School of Law, Catholic University of America, What if you couldn't patent seeds?
Like Strandburg, Winston is talking about the relationship between patents and innovation. There’s no empirical evidence of a connection between patent protection and innovation in the seed industry, especially given the non-patent alternatives in the industry.
The Plant Patent Act and the PPVA allowed plant patents, and the Supreme Court also decided that they’re eligible for regular utility patents. What impact do they have? Patenting has increased 3400% over the past ten years, but it’s not correlated with rises in productivity.
Technology, the shrinking number of industry players, the shrinking varieties of seed planted, and the shrinking alternatives to genetically modified seeds have all had more impact than patents. Trade secret is also an important part of making the seeds differ from year to year. Contracts, meanwhile, govern farmers’ purchase of seeds, and circumvent research and saved seed exceptions found in the patent laws. Courts have upheld these contracts as implementing patent exclusivity.
Q: Is the seed level important any more? If the changes are occurring at the molecular level, then maybe we wouldn’t notice innovation at the seed level.
Winston: She’s using “seed” in a general sense, to include these features. The courts have acknowledged that the contracts/patents extend to nonpatentable features, like the germ plasm.
Adam Mossof, followup: A lot of these techniques are only allowed under antitrust because of the patent protection. So without patent protection, Monsanto might not be able to use these other methods.
Winston: There are 140 varieties of croppable potatoes – but 7 varieties accounted for 70% of production. Seed companies argue that there are no antitrust problems because there are other varieties of seed, but in practice there aren’t, yet courts accept that argument.
Lemley, for Strandburg: Netflix, an intermediate system – what do you do about that, where there are back-office as well as customer service innovations?
Strandburg: Still working on an answer. The distinction between users and sellers is not well enough defined. Particularly with Netflix, a lot of what you might worry about competitors copying from the back office can be protected by trade secrets. It might be that competitors would need to know those things to copy successfully, which preserves a first-mover advantage. If all a competitor is doing is copying mail-order DVD rental, maybe that’s a “sales” use instead of a “use” use and should be protected by patent.
Lemley, for Vetter: wouldn’t patent licensing have prevented license fragmentation and thus been good for FOSS?
Vetter: The question is whether that would have helped or hurt the movement. Centralizing control over licensing would mean less forking, but is that good? Another point is that patent might have avoided some of the debates over whether the GPL was using copyright or contract, and whether contract was legitimate.
Q for Strandburg: The English approach would be to say that people who are good at inventing business methods should be able to do so and license to people who are good at using them.
Strandburg: But the empirical study of user expertise is that you can’t separate out user inventions that way – certain kinds of inventions tend to come from users because of their experiences.
Q for Strandburg: What is the product I buy from Netflix? The DVD or the service? Does the user/competitor distinction collapse?
Strandburg: She defines it according to what the patent claims. Better statutory language to figure out what “use” is could help.
Q for Strandburg: Why not focus on the inventor instead of the invention? If it’s developed by a business user, maybe there will be a better correlation between the features and the rules.
Strandburg: That might be easier in the research tool exemption area. It’s hard here because figuring out whether an inventor was a user is difficult, though maybe no harder than other lines. (Wouldn’t that threaten to restate the flash of genius test?)
Timothy R. Holbrook, Chicago-Kent College of Law, What if patents and patent applications weren't published until they expired?
We think of patent disclosure as a fairness obligation. But getting claims of infringement out of the blue isn’t that surprising even in a publication system – so what function is really served by publication? It’s supposed to teach how to make or perform the subject of the patent. But there are a lot of incentives not to look at patents, or even applications, such as the possibility of willful infringement.
Also, the information disclosed by a patent application may not be very good – 18 months may be a very long time in a tech-intensive industry. Moreover, the content may not really help you out. Even if you do read the patent, you can’t do much with it during the patent term, given the lack of a robust experimental use exception.
The patent might not afford real public notice of its existence, but once you see it you may have an idea of the scope of the claim. But that assumes awareness of the patent.
The alternative would be more like a trade secret regime. Independent invention is a defense against trade secret, of course, so you may have more notice of what you can’t do under a trade secret regime. And in a world without publication, the assertion of a patent claim would put others on notice – you’d lose some of your trade secret-like protection by asserting infringement.
What about the available defenses? Other unexpired patents wouldn’t be available as recent prior art. But patents may not be the best source of prior art, especially with new tech or new subject matter – people complain that the PTO is too patent-dependent. But patents are a network, and you can look at how they cite each other. The use of the patent system as an index to find other patents is an oft-overlooked benefit of publication.
Insight: need to create incentives for applicants to include greater non-patent-based prior art, to improve the utility of this patent network.
It’s not as if the PTO does a great job right now. So what about hidden patents? There does seem to be some public oversight, e.g. when the peanut butter and jelly sandwich patent issued. Delayed transparency would be a harm. Thus, disclosure isn’t necessarily serving a fairness or quid pro quo objective, but actually helping to improve initial patent quality.
Michael J. Meurer, Boston University School of Law, What if economists ran the patent office?
What do economists think of patents as property? The majority of industrial organization economists today tend to think of the patent system as regulatory and closely connected to competition policy, rather than as property.
The FCC has succeeded by using economists to run sophisticated and successful auctions of spectrum. The economists pushed for an auction and thought very carefully about how to pick the right kind of auction given the circumstances (bidders’ valuations are likely to be correlated, which has complicated effects; collusion is possible). So maybe there’s room for improvement in patent.
The methodology is mechanism design: the state of the art in microeconomics. You structure rules of the game to elicit private information held by the people subject to regulation. Lemley and others have looked for mechanisms to add to the patent system, such as gold-plated and regular patents. That would elicit information from applicants about commercial appeal of a specific technology and the robustness of the overall field.
An economist would also want to experiment with – drastically increase – renewal fees.
The PTO has been hostile to academic economists, unlike other agencies, because it understands that economists are a threat to its way of life. The PTO’s customer service orientation helps applicants, but is the wrong structure overall. The examiner or the applicant needs to parse claim language. We need to divide the examiner’s time between different statutory issues, possibly differing depending on the technology. We need to consider whether to require a second pair of eyes in certain circumstances. Economists could help figure out what incentives to give examiners to spend their time most efficiently.
Joseph Scott Miller, Lewis and Clark Law School, What if Joe Meigs had written the nonobviousness statute?
Subtitle: How the perfect murdered the good in 1948. The issue is error detection – the PTO can make false positive and false negative errors. Miller’s gut feeling is that false positives are worse (in patent) than false negatives. Section 103(a) is a very thin operationalization of nonobviousness – it includes a timeframe (at the time the invention was made) and an audience (PHOSITA), and says that dumb luck is okay as a source of invention, but that’s about it.
In 1909, the Supreme Court says that, if skilled people have failed after repeated effots to discover a new and useful improvement, then the person who makes the discovery is entitled to protection as an inventor. This is a concrete and recognizable way of surpassing ordinary skill in the art. Judge Hand points out that we shouldn’t rely on novices, who are dumb in a dangerous way – a novice may find nothing but the obvious in a combination that hasn’t been discovered for a decade after the need arose. The best test of what persons of ordinary skill can do is what they have done. Know your history in the technology and you can evaluate obviousness! But the Supreme Court overturned Hand’s decision upholding a patent for a cordless automatic lighter for a car.
Rejected heresies: the requirement of a flash of genius. The synergism requirement – illustrated by a case involving the modern checkout counter – space for one customer to unload while the previous customer was being checked out. The 6th Circuit said that a long-existing problem born in 1917 was never solved until 1937, thus justifying patent protection, but the Supreme Court reversed and struck down the patent because “two and two have been added together and still they make only four.” The patent bar demanded that the standard be fixed to eliminate both the flash of genius and the synergism.
Giles Rich felt that a positive statement about patentability was dangerous as possibly restriction; though he didn’t want judges to indulge personal standards, he wanted the ability to make patentability arguments to help his clients. Likewise, another drafter said that § 103 had no standard; it was a requirement with no implementing guidelines.
Joseph Meigs was a chemist who died in 1959, the named inventor on 22 patents, 18 as sole inventor. He was also a patent lawyer. Meigs proposed a patent statute that made nonobviousness a question of fact, and that said that sufficient proof of nonobviousness could come from (a) filling a long-felt want, and (b) prior to the invention, the skill of the hard had not supplied, and could not supply, that want. It’s a thick description, but it’s not exclusive.
Meigs was not politically connected; he testified on his own behalf. The biggest question: at what level of granularity do you need to state the “want” at issue? Giles Rich testified against the bill as too rigid, and might incline courts away from sustaining patents where there was no long-felt want. This is absolutely true: it would make more false negatives than §103. But it would make fewer false positives.
In practice Meigs’ standard is useful for litigators – if they can show trial and failure, they are likely to succeed in showing nonobviousness. Putting it in the statute would signal better to inventors where they should work to get protection. It would also encourage them to defy conventional wisdom in the art. The analysis wouldn’t be hindsight-prone. And it would put today’s evidence into stronger narratives – the art taught away from the invention, the invention was greeted with surprise and skepticism. It would also reanimate multiple invention as a contraindicator to patentability, a doctrine that has now died on the vine.
Katherine J. Strandburg, DePaul University College of Law, What if we relied on user innovation to produce business methods and did away with business method patents?
Some people invent things to use (not sell) them. User innovators are less likely to need patents.
Business methods are often user innovations – administrative or “back-office” methods, such as keeping accounts, inventory tracing, payment processing. They’re often tailored to specific business contexts and embodied in software. They’re sometimes purchased through consulting services or individualized software. They tend to be non-self-disclosing in use, which means they can be kept as trade secrets by user innovators.
A different category is products sold to consumers: hub-and-spoke mutual funds, online gambling, long-distance packages, Netflix, iTunes, services like massages, surgery, piano lessons – not user innovation; often self-disclosing as sold.
A third category, customer service methods, somewhere in the middle: one-click purchasing, method for internet payment, method for advertising. Very often these are user innovation, but self-disclosing in use unlike the back-office innovations.
Greater intrinsic rewards: efficient business practices are their own reward, and create a first mover advantage including customer switching costs. Business methods also meet heterogeneous needs and provide customized solutions. Some business methods are skill-based and inventors do them better. User innovators may have lower invention costs, since innovation is a side effect of use rather than the product of a research program.
User innovators are also less likely to use patents to disseminate their inventions. When use gives a competitive advantage, the user wants to avoid others having embodiments of the invention like one-click purchasing. But seller innovators want to disseminate their inventions to customers. Thus user innovators tend to use patents to restrict others’ use.
User innovators therefore make systematically different inventions and engage in systematically different patent behaviors. If there are these differences in responses to patent’s incentives, can we tailor patent doctrine to recognize that user innovation is different? One possibility: a broad exception for use as a business method, like a research use exception. There would then be no need to determine ahead of time whether something is a business method patent. Linedrawing would be easier in context, and there would be no defense for competing sales of the patented product.
For back office methods, sellers would be protected from competitors by patenting and from users by copyright, know-how, and difficult-to-implement methods. Users would gain the benefit of either earlier disclosure or earlier nonexclusivity.
For products, sellers would be protected from competitors by patenting, and from users by make v. buy tradeoffs.
Finally, customer service methods: if it’s non-self-disclosing, a use exemption would promote trade secrecy. If it’s self-disclosing, competitors will copy the method. The desirability of this effect depends on the extent to which inventive costs (often low) are balanced by first mover advantages, switching costs, etc. (often high).
Bottom line: an exception would address concerns about exclusive control of basic tools of eocnomic competition, similar to concerns about patents on research methods. It would tend to neutralize patents on “trivial” business methods, which are least likely to need patent incentives. Costs: more reliance on trade secrets.
Greg Vetter, University of Houston Law Center, What if the GPL had been patented?
The GPL is a business method of licensing software. Vetter claims it’s useful, novel, and nonobvious. There would be very interesting issues of equivalents (e.g. to the viral elements of the license) and other infringement questions.
New issue: dual licensing, which allows a choice of GPL or proprietary terms. That wouldn’t be possible if the GPL were patented. People have also adjusted the GPL to make exceptions, for example in the Linux kernel – application programs that run on the kernel don’t have to be GPL. Netscape released Mozilla as open source, under a “weak” copyleft – you could make changes to files but would have to apply GPL terms within those files. The exclusion of these possibilities could have had dramatic effects on FOSS.
Still, the hypothetical GPL patent enforcement possibility wouldn’t seriously diminish FOSS’s potential. There are other licensing modes, such as BSD-style licenses. There are synergistic effects of having code out there and available even if it’s not pure GPL. Also, there’s been notable pragmatism in updating the GPL v.3. There are issues about license proliferation – patent control could have limited such proliferation, assuming (as is likely) that the owner, Richard Stallman, would have licensed the licensing method to everyone.
Some software patents now address open source – Microsoft has a patent application for isolating the licensing layer of software, and another company has a patent application for looking for FOSS license terms in software. So this isn’t an impossible hypothetical, despite the incongruity of imagining Stallman with a patent.
Elizabeth I. Winston, Columbus School of Law, Catholic University of America, What if you couldn't patent seeds?
Like Strandburg, Winston is talking about the relationship between patents and innovation. There’s no empirical evidence of a connection between patent protection and innovation in the seed industry, especially given the non-patent alternatives in the industry.
The Plant Patent Act and the PPVA allowed plant patents, and the Supreme Court also decided that they’re eligible for regular utility patents. What impact do they have? Patenting has increased 3400% over the past ten years, but it’s not correlated with rises in productivity.
Technology, the shrinking number of industry players, the shrinking varieties of seed planted, and the shrinking alternatives to genetically modified seeds have all had more impact than patents. Trade secret is also an important part of making the seeds differ from year to year. Contracts, meanwhile, govern farmers’ purchase of seeds, and circumvent research and saved seed exceptions found in the patent laws. Courts have upheld these contracts as implementing patent exclusivity.
Q: Is the seed level important any more? If the changes are occurring at the molecular level, then maybe we wouldn’t notice innovation at the seed level.
Winston: She’s using “seed” in a general sense, to include these features. The courts have acknowledged that the contracts/patents extend to nonpatentable features, like the germ plasm.
Adam Mossof, followup: A lot of these techniques are only allowed under antitrust because of the patent protection. So without patent protection, Monsanto might not be able to use these other methods.
Winston: There are 140 varieties of croppable potatoes – but 7 varieties accounted for 70% of production. Seed companies argue that there are no antitrust problems because there are other varieties of seed, but in practice there aren’t, yet courts accept that argument.
Lemley, for Strandburg: Netflix, an intermediate system – what do you do about that, where there are back-office as well as customer service innovations?
Strandburg: Still working on an answer. The distinction between users and sellers is not well enough defined. Particularly with Netflix, a lot of what you might worry about competitors copying from the back office can be protected by trade secrets. It might be that competitors would need to know those things to copy successfully, which preserves a first-mover advantage. If all a competitor is doing is copying mail-order DVD rental, maybe that’s a “sales” use instead of a “use” use and should be protected by patent.
Lemley, for Vetter: wouldn’t patent licensing have prevented license fragmentation and thus been good for FOSS?
Vetter: The question is whether that would have helped or hurt the movement. Centralizing control over licensing would mean less forking, but is that good? Another point is that patent might have avoided some of the debates over whether the GPL was using copyright or contract, and whether contract was legitimate.
Q for Strandburg: The English approach would be to say that people who are good at inventing business methods should be able to do so and license to people who are good at using them.
Strandburg: But the empirical study of user expertise is that you can’t separate out user inventions that way – certain kinds of inventions tend to come from users because of their experiences.
Q for Strandburg: What is the product I buy from Netflix? The DVD or the service? Does the user/competitor distinction collapse?
Strandburg: She defines it according to what the patent claims. Better statutory language to figure out what “use” is could help.
Q for Strandburg: Why not focus on the inventor instead of the invention? If it’s developed by a business user, maybe there will be a better correlation between the features and the rules.
Strandburg: That might be easier in the research tool exemption area. It’s hard here because figuring out whether an inventor was a user is difficult, though maybe no harder than other lines. (Wouldn’t that threaten to restate the flash of genius test?)
Friday, March 30, 2007
What Ifs?
Kevin W. Saunders, Michigan State University College of Law: "What if every 'if only' statement were true?"
Counterfactuals are complicated animals. People do a pretty good job on them, but they can’t explain why.
In standard propositional logic, “p implies q” is true every time p is false, because q’s state doesn’t contradict “p implies q” whether q is true or false. But that’s not good enough for counterfactual reasoning. Also, if p were other than it is, other things would be different: If I were the Queen of France, my husband would be the King.
Nested spheres of possible worlds. Some propositions would be true in every possible world, others wouldn’t. We can look at a curve intersecting those nested spheres as worlds in which p is true – if it were true, the curve would encompass the center. The parts of the curve closest to the center are the closest states of the actual world in which p is true:
Strong theory of strict implication: in any world in which p is true, q would be true. But that’s generally too strong (in a world where I was Queen of France, I might have a different husband). Instead, look at the region where p is true and closest to our world. If q is true in that most similar world, then “p implies q” is right in the counterfactual:
Counterfactual logic creates a failure of transitivity: If J. Edgar Hoover had been born in Russia, he’d have been a Communist. If J. Edgar Hoover had been a Communist, he’d have been a traitor. But if J. Edgar Hoover had been born in Russia, he wouldn’t have been a traitor.
Also, a failure of contraposition: if p implies q, not-q implies not-p. This is true regularly, but not true for counterfactuals.
Counterfactuals are complicated animals. People do a pretty good job on them, but they can’t explain why.
In standard propositional logic, “p implies q” is true every time p is false, because q’s state doesn’t contradict “p implies q” whether q is true or false. But that’s not good enough for counterfactual reasoning. Also, if p were other than it is, other things would be different: If I were the Queen of France, my husband would be the King.
Nested spheres of possible worlds. Some propositions would be true in every possible world, others wouldn’t. We can look at a curve intersecting those nested spheres as worlds in which p is true – if it were true, the curve would encompass the center. The parts of the curve closest to the center are the closest states of the actual world in which p is true:
Strong theory of strict implication: in any world in which p is true, q would be true. But that’s generally too strong (in a world where I was Queen of France, I might have a different husband). Instead, look at the region where p is true and closest to our world. If q is true in that most similar world, then “p implies q” is right in the counterfactual:
Counterfactual logic creates a failure of transitivity: If J. Edgar Hoover had been born in Russia, he’d have been a Communist. If J. Edgar Hoover had been a Communist, he’d have been a traitor. But if J. Edgar Hoover had been born in Russia, he wouldn’t have been a traitor.
Also, a failure of contraposition: if p implies q, not-q implies not-p. This is true regularly, but not true for counterfactuals.
What Ifs and Other Alternative Intellectual Property and Cyberlaw Stories
Michigan State University College of Law
There was a great intro on counterfactuals by Kevin Saunders. I will post on it later if I can figure out how to draw and post the pictures.Panel 1: Free Speech, Privacy and Virtual Reality
Ann Bartow, University of South Carolina School of Law, What if pornography was not eligible for copyright protection?
Bartow started with two provocative questions: How many in the audience thought of themselves as authors? (All of us.) How many had had positive experiences producing or performing in pornography? (Nobody raised a hand.)
IP has generally decided to leave regulation of subject matter in the ordinary sense (gambling, pornography) to those specific fields – gambling devices are patentable, but the legislature can ban gambling. But that skips over the question of incentives. Once we give copyright protection to pornography, we’ve incentivized its creation.
Yesterday’s Perfect 10 decision: these naked women are completely commoditized and fungible – their very fungibility seemed to incite the district court to give more protection under copyright, because there is so much competition in the marketplace. Most of the models transferred their rights of publicity to Perfect 10 – what’s this about? Some of the sites CCBill served used words like “illegal” and “stolen,” and Perfect 10 argued that this served as a red flag of infringement. But the court thought that, in the context of pornography, those words could have been just puffery enhancing the appeal of salacious pictures. So it turns out that content does matter – it wouldn’t have been the same logic for stolen music.
The application of copyright law to photography: Why doesn’t Oscar Wilde have any rights discussed in Saxony? What is the relationship of the body – its infinite variability, its similar appearance in different photos – to the photographer? How much creativity can the photographer exercise over Wilde’s mein?
Why, in an era of animation and computer generation, is live porn still so popular? There’s something about “reality” that adds to porn’s appeal. Bartow asks whether we could deal with the problems in production of pornography by switching to simulation. (Hey, if it’s good enough for Bridgeport Music, why isn’t it good enough for Playboy?) Would copyright be any different? Would the effects on viewers?
Conclusion: Bartow is focused on the production, not the consumption, of pornography. The conversation about pornography in the academy seems to have stopped; Bartow is not anti-sex or pro-censorship, but does want to ask about the conditions of production and whether we want to support them through IP policy.
Amy Gajda, College of Communications & College of Law, University of Illinois, What if Samuel D. Warren’s daughter had eloped?
The Right to Privacy is one of the most important law review articles ever. They wanted to redefine certain protections, specifically “the right to be left alone.” Warren & Brandeis blamed a lot of things on the press – we need to protect the public from personal revelations and from wasting their time on gossip. Prosser believed that the impetus for the article was the press coverage of Mrs. Warren and, specifically, the wedding of a Warren daughter. Problems with Prosser’s theory: Warren doesn’t seem to have had a child old enough to be married at the time he wrote the article. For Samuel Warren’s own wedding, the NYT 1883 described the wedding dress, presents, parties and the number of guests invited. There was also coverage of Mrs. Warren after the wedding. Her father was a big shot, a US senator from Delaware and Secretary of State.
Gajda argues that privacy rights against the press would have developed anyway. Courts had already freely criticized journalism as Warren & Brandeis did, and had already recognized privacy torts. They routinely held journalists in contempt for truthful reports about pending court cases. Even without that experience suppressing truthful speech, the yellow journalism of the day would have prompted some response by someone else.
Warren & Brandeis wanted to recast privacy as more emotional and less economic/reputational. Contract, property rights and trade secrets already protected privacy, and the Warren & Brandeis concept was “another application of an existing role.” Yet courts were already willing to look at the nonreputational harm of exposure to the public – in libel cases, they held that the truth could aggravate the harm to the peace of the family. An 1811 case condemned revelations from a letter written “in mystery and confidence” that revealed the writer’s “open heart.”
Why didn’t The Right to Privacy use these truthful libel cases? Because they have their basis in the Star Chamber, and they were bad news to general defenders of free speech. Brandeis & Warren needed to distinguish truth in which there was no real public interest from truth in which there was.
Final irony: Miss Helen Warren, Warren’s daughter, was a singer who likely courted the publicity that Warren himself criticized.
Greg Lastowka, Rutgers School of Law-Camden, What if reality were pervasively augmented?
General idea: what if digital networks filled your standard visual/auditory field with useful/interesting data? Like sunglasses, providing an overlay to the physical world. You could have different overlays – gamers, Fox News, etc. Is there anything new in this? Physical space carries a lot of data now, not just explicit messages but messages sent by the architecture around us. Billboards exist in reality and in Second Life, which also has a strong anti-billboard contingent.
The problem is that information crowds out other information. Cellphones can cause problems for third parties when a driver is paying attention to the wrong data stream. There are also aesthetic harms. Opt-out may be inadequate – your cellphone in public, like your laptop in class, affects me. Also, it may be difficult to opt out if everyone else has opted in and life is now configured for the default.
Another risk: virtual balkanization, the creation of subgroups sharing a reality that differs from that of others: the Republic.com objection.
A third problem: Advertising creep. The first use of these technologies will be ad-related. (Not porn?)
Privacy: Your sunglasses tell you everything about a house’s owner when you look at the house. Is that worse than the current situation? (It would sure enable my real estate fantasies.) Relatedly: Wikiality. What if people could annotate your house with their own thoughts about it? Flickr has Memory Maps allowing people to tag specific places and record their memories.
Basic question: When the virtual displaces the real, who controls the virtual? Private control will expand, because regulation will start to affect “speech” instead of “conduct.”
Cheryl B. Preston, J. Reuben Clark Law School, Brigham Young University, Free Speech and Internet Pornography: What if Congress and the Supreme Court had been tech savvy in 1995?
Larry Lessig described the CDA as a law of extraordinary stupidity that practically impaled itself on the First Amendment. It was passed with little discussion or thought. Badly drafted, internally inconsistent, and profoundly unconstitutional, the CDA triggered a defensive reaction by people who actually participated in and thought about the internet.
The Supreme Court struck down the offensive parts, but in the process of doing so said some things about tech that are no longer true. E.g., odds are slim that a user would enter a sexually explicit site by accident; children require some sophistication to find internet porn. Pediatrics in February published a study showing 42% of 10 to 17-year-olds have been exposed to internet porn, mostly inadvertently. Compare to Pacifica, which found broadcast to be specially regulable because of its pervasiveness and unique accessibility to children. The internet is equally pervasive and invasive – perhaps more so than radio these days. We intentionally emphasize computer skills for children, in contrast to our educational policies about TV and radio. We shower our kids with electronic devices for internet connection. And children learn the necessary skills for manipulating the internet faster than the rest of us.
Congress wasn’t any worse informed than the rest of us in 1995 – academics were pointing out that only 5% had internet access, and claiming that it was unlikely that the internet would outstrip TV and radio access. (And I’m pretty sure it hasn’t – Preston doesn’t quite claim that it has.)
Even recently, courts think that kids can’t circumvent filters, but Preston knows this is wrong. (I want to see the evidence for this – I’m sure it’s true for some kids, but how many? Can they do it at the library, or do they need control over the computer?)
A better drafted statute might not have stifled the internet. Not all regulation is bad or triggers a slippery slope towards a Chinese wall around knowledge.
Downside of not getting it right in 1995: The explosion of available pornographic material. The DMCA rolled over the techies’ objections to protect copyright, and maybe some middle ground could have been used to regulate porn in a similar way. You used to have to engage in an embarrassing, effortful physical search to find the worst of the worst; now it’s easy access at home. (Videotapes caused the same shift, it seems to me.) It’s hard to stay sober when you live and work at a bar.
The precedent and language from CDA/COPA cases has now stifled the development of law – Congress is discouraged and unwilling to try again. The cases limit the analogy to radio and TV. In addition, the way the Court described the internet becomes the reality – the nature of the internet shaped itself around what the Court said was possible.
She doesn’t think there was a magic answer, but Congress was so ignorant in 1995 that now the temptation is to ignore problems entirely. (How does this interact with legislative proposals to regulate MySpace? To kick sexual predators off the internet entirely? State law regulations of spam?)
Questions: Mark Lemley: What would happen to the availability of porn in the absence of copyrightability? Free copying could increase availability; technical measures might arise as a substitute for IP rights; or the collapse of the incentive might decrease availability.
Bartow: You’re going straight to consumption and creativity and economics – her concern is how porn affects the people who produce it. Porn gets more First Amendment protection than advertising, but copyright treats them both the same. We all recognize that porn is different – note our unwillingness to identify as pornographers.
Lemley: It’s not just money. If you think the harm of porn stems even in part from consumption, you should look at incentives. (I’d add that the production level will obviously be affected by incentives, so incentives are still a significant question even bracketing consumption effects. Copyright for virtual porn and no copyright for real-person porn would substantially change production incentives.)
Michael Landau: What should the role of courts be in determining copyrightability based on content? Congress has prohibited scandalous and immoral TMs, but has enacted no such restriction in §102(b).
Bartow: At the time, Congress assumed no copyrightability. That assumption was flipped decades ago, but Congress simply hasn’t revisited the issue. Congress likes the ability to blame the courts for their decisions. CCNV suggests that the courts have some flexibility, at least in areas like who is an author.
Question: What about women who produce porn? Is it feminist to make one’s own porn?
Bartow: Factually, there’s a bunch of lying that goes on about who’s producing the porn. A lot is PR, fronting for male owners, e.g., Suicide Girls. Contrast the liberal response to porn with the liberal response to Wal-Mart: we have no problem regulating Wal-Mart when it abuses workers; why not porn?
Question: Porn and obscenity are two different things, especially in the production phase. You won’t know if you pass the literary/artistic/social/political value test until the work is complete. (Yeah, I’m sure it’s difficult to tell based on the script.) Also, maybe we can combine code and regulation to create white spaces on the internet along with .xxx domains.
Bartow: The reason she talks about obscenity is that Mitchell Bros. explicitly says that even obscenity is copyrightable.
Preston: We can definitely think about allocating ports or other internet resources a la carte, allowing families to choose what they want to be available at the ISP level. That would prevent even tech-savvy kids from evading restrictions.
Comment for Gadja: Warren & Brandeis took a while to catch on; it took Legal Realism to break down the formal classifications that prevented expansion of the privacy right. That’s the real causal foundation for the new torts.
Q: ISPs can offer filtered Internet without a legal backstop, as they do in Singapore or in AOL’s walled garden approach. But there doesn’t seem to be much uptake here – why? The real problem is not law/tech failure, but a failure of norms.
Preston: The AOL filter can be proxied through at home. What we need is an ISP-level access block, and there’s no current way to do that without overblocking and evasion.
Q: Saudi Arabia blocks about 99% of porn, with a 20-person staff. They’ve constructed their internet to work this way. AOL can also filter out proxy servers. You can make it so difficult that your kids have to be Linux programmers to evade.
Wendy Selzer: Preston’s reference to the success of the DMCA made her gasp; in lots of cases it’s been used to suppress lots of speech. Selzer thinks we’re better served by a black-and-white view of regulation (that is, it’s bad).
Preston: She meant that we haven’t been hands-off in other areas – Congress has enacted limitations with profound effects on the internet, so it’s not as if we have a lack of regulation and regulating porn would be the first/only intrusion.
Selzer: What makes you think Congress can do better regulating porn than copyright?
Preston: That’s the glory of what-ifs.
Brief comment on CCBill
Perfect 10, Inc. v. CCBill LLC, -- F.3d --, 2007 WL 925727 (9th Cir.), obviously has plenty to keep IP lawyers buzzing for a while. The court’s conclusion that the CDA preempts state-law false advertising claims based on making CCBill responsible for third parties’ statements is completely unsurprising. Its broader holding that “intellectual property” means “federal intellectual property,” of course, is much more eye-opening. Notably, Judge Kozinski was a member of the panel, though he didn’t write the opinion. No friend of California’s extremely expansive right of publicity, Kozinski was doubtless sensitive to the variations between state rights of publicity, which do create risks of inconsistent state laws governing third parties. Given the essentially complete overlap between state and federal trademark law, and the relative paucity of internet trade secret cases – especially third-party liability trade secret cases, which are usually losers based on lack of any special relationship between the plaintiff and the third-party disseminator – the real impact of the holding is on right of publicity claims. (It’s not impossible that state common-law copyright claims could also be affected, but I’m not aware of any such litigation.)
Thursday, March 29, 2007
Second Circuit rejects foreign famous marks doctrine federally, certifies state question
ITC Ltd. v. Punchgini, Inc., --- F.3d ----, 2007 WL 914742 (2nd Cir.)The Second Circuit, after a long wait, has finally ruled on the validity of the famous marks exception to the territorial scope of trademark protection – and found no such exception in federal law. Thus, it affirmed the district court’s finding that the plaintiff had abandoned its mark BUKHARA for restaurants in the US, and could not maintain a federal unfair competition claim under §43(a). Significantly, however, it certified to the New York Court of Appeals the questions whether New York recognized the famous marks exception under state law, and if so what standard of fame was required (listing several possibilities, from mere secondary meaning to federal dilution fame). The case isn’t over, but we are well on our way to a clear answer about the validity of the rule in New York, whose decades-old trial court decisions provide the foundation for the claim that the US occasionally does protect famous foreign marks that aren’t in use within its borders.
Turning to less significant matters, the court affirmed the dismissal of plaintiff’s false advertising claim, since plaintiff lacked standing in the absence of evidence that defendant ever made statements comparing its Bukhara Grill to plaintiff’s Bukhara food products sold in the US. Defendant did compare the Bukhara Grill to plaintiff’s New Delhi Bukhara restaurant. Even though a significant percentage of defendant’s customers are of Indian descent, and even if such people are more likely to visit India, the court found any risk to plaintiff’s reputation too attenuated to support standing. Moreover, even if the court accepted plaintiff’s legal claim that well-developed plans to enter a market can support a finding of competitor standing, a question on which it reserved judgment, plaintiff had shown no such well-developed plans.
Sunday, March 25, 2007
The messy intersection of copyright, trade secret, and false advertising
PrecisionFlow Technologies, Inc. v. CVD Equipment Corp., 2007 WL 844893 (N.D.N.Y.)
Plaintiff PFT, which makes custom gas and chemical delivery systems and provides computer chip fabrication services, sued CVD for false advertising and commercial disparagement under the Lanham Act and related state law claims. In essence, PFT claimed that CVD falsely told others in the industry that PFT’s goods and services infringed CVD’s IP rights, causing PFD damage. For example, when PFT bid on a job for Lucent, with which it had an ongoing business relationship, CVD told Lucent that PFT’s performance would infringe CVD’s rights. CVD got the contract instead.
CVD countersued PFT and PFT’s president, the former employee of a company CVD bought, alleging that he stole the company’s IP, including copyrighted technical drawings, software, and operations manuals. CVD has applied for registrations and registered copyrights covering some of the IP it purchased, including technical drawings for the “Silane Delivery System.” CVD claimed that PFT copied substantial portions of the Silane Delivery System and other works, and that PFT misappropriated confidential information, wrongfully disclosed that information to customers, and interfered with CVD’s business relations with Lucent by falsely informing Lucent that PFT was entitled to sell competing goods. Thus, CVD’s counterclaims alleged copyright infringement, unfair competition, unjust enrichment, and tortious interference with prospective business relations.
PFT’s defense to the copyright claims was that the relevant information wasn’t created by the predecessor company and that whatever protectable rights it may have had were abandoned, transferred, or licensed to third parties. This also affects the analysis of whether the information embodied in the works was a trade secret.
The works at issue were identified as: Lucent Silane Delivery System Drawings; four Emcore standard gas panel drawings; Lucent and IBM wiring diagrams and drawings; Silane Delivery System Software; IBM Silane Systems Software; Lucent Gas Cabinet Software; IBM Gas Cabinet Software; and IBM Touch Screen Software. As the names indicate, PFT argued that many of the drawings were provided by customers free of charge, given that customers in this industry typically provide detailed specifications for the equipment they want built, including schematic and/or conceptual drawings and even specifying component manufacturers. PFT’s president said in a declaration that his former employer did little or no independent engineering.
CVD submitted a declaration from its employee, the former president of the predecessor company, who stated that the company would sometimes develop schematic drawings, and that in any event it would prepare detailed proprietary manufacturing, assembly and layout drawings, because the schematic drawings were insufficient for manufacturing purposes. If the customer ordered standard equipment, the company would use and if necessary modify standard detailed drawings it previously created. He added that the company did perform extensive design work, much of which was billed to customers. (Even so, are these copyrightable derivative works? Or do they flow so naturally from the schematic drawings that no independent copyright can subsist, either because of the originality requirement for derivative works or because of merger and related doctrines? Because of the undeveloped posture of the case, and because of the court’s focus on trade secret issues, these questions are unaddressed.)
PFT also argued that the works weren’t kept confidential, submitting declarations that it was common practice for works like the drawings, operations manuals, and software at issue to be freely exchanged in the industry and given to customers without restriction; products and equipment were regularly shown at trade shows and made available for unrestricted inspection at public auction. CVD submitted conflicting evidence, including evidence that the company used nondisclosure agreements with customers (though the agreements don’t seem to have specified what counted as confidential information, raising the question of whether the drawings, manuals, etc. were actually covered).
Given these factual disputes, the court declined to grant summary judgment to the counterdefendants. On the state law counterclaims, the court rejected PFT’s preemption defense because the extra element of breach of duty was allegedly present – even with respect to the unjust enrichment state-law claims. That holding seems shaky, given that unjust enrichment doesn’t require that extra element, unlike the trade secret claims. The elements of unjust enrichment are that the defendant benefited at the plaintiff’s expense and that in equity and good conscience the defendant should make restitution – that’s a tort that can be committed just by copying, in the absence of preemption. Adding in breach of duty in this specific case to avoid preemption is transforming the tort.
The court also rejected PFT’s claims for false advertising under New York law, because CVD’s conduct wasn’t consumer-oriented and didn’t affect the public at large, given the highly specialized goods and services at issue. The Lanham Act has no such limit, and the court found disputed issues of fact on the federal claims and the state-law tortious interference claims.
Saturday, March 24, 2007
Gender & IP, Panel 3
Diane Zimmerman, NYU, comments: The papers here confirm how nuts we are about issues of gender. Zimmerman thinks IP may be more neutral than other fields, but it’s not neutral in terms of the life situations that get played out under the IP rubric. The papers also confirm that we should fear overprotection. Gender-specific denigrating commercial uses need a powerful fair use tradition allowing commenters to fight back.
Finally, this day demonstrates the marginality of IP – it’s a background tool and helps in some instances but it isn’t the thing that most people rely on most of the time to engage in creative activities and get them out to the public. We need to think carefully about what people actually want – Goswami’s paper points out that there’s no such thing as a group of people who want to protect traditional knowledge in a single way; they want many different things, from commercial rights to nonuse by outsiders. What are the economic structures that allow people who do important work to get that work recognized and marketed in the way they want? It is an economic issue, not an IP issue.
Ann Bartow, South Carolina, Gender as Intellectual Property: The Propertization of Women: Her topic is pink, the color of femaleness. Pink is a color for girls in a way that there is no color for boys – maybe for babies, but after that, blue is the color of depression and Viagra. (But see this history of pink/blue for babies.) There’s no enduring cultural connection between men and a particular color, because men are the standard and women are the other.
The pink color of fiberglass insulation as a trademark is one of the Supreme Court’s examples of how color alone can be a mark. In Qualitex, the Court recognized that the Abercrombie spectrum didn’t make much sense for color – what is the generic or descriptive color of a dry-cleaning pad? Is it arbitrary or functional?
Bartow thinks that people use pink in TMs in an instrumental way, a functional way. Many of the 8000 TMs that use pink are for women’s products. When men adopt pink they usually do so humorously, or insultingly – the pink triangle was used by the Nazis to denigrate homosexuals. Now there have been significant attempts to take back the pink triangle, but remember the origins.
Can TMs denigrate women? That’s one strain in Bartow’s analysis. The other is plain old confusion – TMs intentionally impute values and meanings to goods and services that we’re supposed to buy – femaleness and subordination.
Why is Owens-Corning fiberglass insulation pink? Her guess – it looks friendlier, like cotton candy. Victoria’s Secret also has a valuable PINK trademark. (And gee, what could it possibly mean for women to walk around with PINK on their chests or backsides?)
Communicative pink: on Our Bodies, Ourselves; Code Pink (antiwar group); Carolina Girl design that takes the South Carolina flag and makes it pink; on a “Women for Peace” banner. Decorative pink: on products for girls, on Camel’s new No. 9 cigarettes. Pornography pink is also common. (It’s not only pink that aids in the pornification of ads for women; Bartow showed an ad for Clinique moisturizing lotion that looked like a money shot.)
Pink ribbons for breast cancer: Barbara Ehrenreich wrote a powerful critique of this a while back that Bartow’s drawing on. Antiabortion groups use the pink ribbon to promote the theory that abortion causes breast cancer, because there are no TM rights preventing that.
Pink vacuum cleaners (traditionally feminine), pink boxing gloves (transgressive but cute), the Little Pink Tool Kit (to avoid icky boy germs), pink golf clubs (pinked up by Wilson for “the cure”). Message: buying our product helps women.
The locker room for the opposing team at Iowa is painted pink – it’s supposed to make the visitors feel gay and underperform.
All these pink marks are intended to signal otherness: (1) this is for women, (2) buying this helps women, and/or (3) this is a women-related product for men. TM owners free-ride on the existing meaning of symbols and appropriate them for private use.
Elizabeth Judge, University of Ottawa, Canada, Eyeing IP: Gender, Senses, and the Visualization of Intellectual Property: IP law favors the visual as an object of legal protection; subject matter based on other senses is less likely to get protection. This has gendered consequences for access to IP and for access to IP rights. The framing and interpretation of IP has been based on peculiar and narrow epistemologies, especially with respect to how personality is expressed.
If we take the IP system seriously on its own terms, then it’s creating skewed incentives to create visually.
If the media women create in are not within the incentivized areas, IP’s bias limits or redirects them. We should be, normatively, sensing IP rather than looking at it.
Examples: requirements of drawings for patents and industrial designs; stronger protection for graphic than literary characters in TM and copyright; traditional emphasis on the visual in defining what can be a TM; the way personality is defined by visual aspects for the right of publicity. Assumptions: knowledge comes from vision.
Her examples are Canadian, but other systems have the same features.
Industrial Design Act: design means features of shape, configuration, pattern or ornament that “appeal to and are judged solely by the eye.” Aesthetics shouldn’t be limited to the visual – you can lure customers in other ways.
Trademarks: TRIPs allows countries to limit TMs to visually perceptible marks, but doesn’t require it. Canada hasn’t made many moves to accept scent, sound, touch TMs etc. A mark is defined by its purpose, something used to distinguish goods and services. It could include nontraditional marks, but the interpretation has been almost entirely visual – the Federal Court of Canada has pointed to “something that can be represented visually.”
Playboy TM toupees – Playboy registered the picture and wrote out PLAYBOY. On the actual hairpieces, PLAYBOY was nowhere to be found. Instead, salespeople told customers that these were PLAYBOY toupees. The question was whether they were using the mark – the Federal Court said no, there was no use without a visual indication. The case doesn’t necessarily stand for the proposition that sound marks aren’t registrable, but that a registered visual mark isn’t being “used” when salespeople just say the word. But it’s been read more broadly.
If you register musical marks, you get a registration in the distinguishing capacity of the notation, not the music as played. From a cognitive perspective, marks based on other senses should be registrable.
Potential sex differences in sex; Women’s smell memory/odor identification is consistently stronger than men’s.
One concern is providing proper notice to potential competitors. But technology advances, and there are solutions.
Copyright: on its face, the law is sense-neutral – “whatever may be the mode or form of its expression” – but the types of works are generally defined with respect to the visual. For fictional characters, medium matters. Literary characters get less protection than graphic or audiovisual characters – looks win out over personality. Example: the Michelin man, whose image is protected regardless of the other characteristics he exhibits.
Under Canadian law, an “artistic work” requires visual expression.
Janet Cardiff, an experimental artist whose multimedia work focuses on sounds. The experience of the work changes as one moves through space. Under the Copyright Act, she’s not an artist, because it’s only visual media that are “artistic works.”
We should change how we see IP – start sensing it instead. This would be a more sophisticated view of “recognition” both cognitively and psychologically. This is a call for IP expansion, equalizing access to IP rights – it is not in conflict with a call for making IP rights less deep. More user rights, shorter duration, etc. are all consistent with more expansive subject matter.
Ruchira Goswami, West Bengal National University of Juridical Sciences, Calcutta, India, Intellectual Property Rights of Indigenous Peoples: A Gendered Perspective from India: Three different examples (1) embroidery, (2) painting, (3) folk music—all three are from the eastern part of India, and all are done by women and therefore unacknowledged by the overall community. There is no protection for these cultural protections in the current legal regime.
International law: supposed to confirm rights of indigenous peoples over intangible cultural practices and traditions. “IP” has started to become part of that language of self-determination.
The copyright regime is inconsistent with traditional cultural productions – problems of authorship, originality, fixation, duration.
Kantha embroidery– in Bangladesh and West Bengal – began with women weaving blankets and became more sophisticated. The art isn’t dying; women have access to the markets, because many are being trained in kantha. The problem is one of ownership: there are traditional motifs, and then there are urban designers who are ordering new designs and having them done. Traditional motifs are gradually being lost. Women are not designers any more, but are responding to the demands of the market. It isn’t an expression of culture.
Madhubani painting and authentication – from Bihar, line drawings using vegetable dye for color. Lots of human figures, reflecting common scenes and folk texts. They’re easy to replicate and sell at 1/10th the price; the women making the paintings have no legal protection for copying. The creators are indigenous and there is no legal protection for their traditional knowledge because India doesn’t recognize “indigenous” as a relevant category.
Folk music and expropriation – there is a growing market for such music. The lyrics are the same, but the history has been removed. For example, Goswani discussed (and sang!) a song about migrant laborers in Assam who want a better life and are deceived about their prospects. There’s a traditional version, and a modern version available on a CD with a completely different presentation, absent the pathos of the original. Is this a violation of the moral right of the community? It’s not a religious desecration, and the song isn’t lost, but the history and the protest are lost. This hybridization is dangerous.
Central issue: remuneration. Economic returns are desirable – but at what cost? Of course these communities want to access the market and make money. Is authenticity important when your basic needs aren’t being met? Protection has to be a combination of economic returns and compensation for moral right violations. Recognition is important as well – it’s not enough to say that this is traditional music on your CD, but you have to give a history of the community and its struggle.
Problems: IP is exclusionist and individualistic, which is unfamiliar and uncomfortable to women. Human rights discourse is also male-centric. Moreover, women’s rights discourse is weak in South Asia. How can we step outside these paradigms to find the right solution?
Farley: The visual requirements aren’t homogenous – certain visual requirements meet the needs of having a definite scope for the law’s protection. But Qualitex discusses difficulties in uniform perception of the visual – differences in shades.
Judge: Canada needs a similar discussion of the ontological status of marks and our relative capabilities of representing and distinguishing different sense impressions.
Farley: Visual stimuli give us visceral reactions, as Farley’s negative reaction to Bartow’s multiple images of pink. We can call that functional.
Bartow: The Iowa coach suggested that the locker room was a “calming” color.
Q: Chanel No. 5 smells very distinctive; why shouldn’t there be TM rights in it? Copying it is passing off. (I presume through post-sale confusion, since the buyer and the person who applies it would presumably know if the competitor’s bottle were properly lableled.)
Gender & IP, Panel 2
AU’s IP & Gender conference, Panel 2 (informally: international issues and capacity-building)
Helen Lom, Director, WIPO Awards & Gender Issues, WIPO, Empowering Women Through Awareness Raising and Capacity Building About Strategic Uses of Intellectual Property Tools to Gain Economic Advantage: Why? How? WIPO’s Practical Experience: The UN has system-wide commitments to gender equality, both internally (staffing) and externally. The UN sees this from a human rights perspective (Universal Declaration of Human Rights, CEDAW) and an economic development perspective. Closing the gender gap is a key poverty reduction and sustainable development strategy.
Two principal approaches: (1) Gender mainstreaming (making women and men equally integral in every program), which would be ideal in a perfect world, but has to be extremely comprehensive and is resource-intensive. (2) Women-focused activities. Both are strategic approaches and both can be appropriate depending on institutional (how sensitive is senior management to gender issues?) and other issues.
WIPO’s experience as a small, technical organization: WIPO has to address whether IP is gender neutral – many people WIPO deals with think it is -- and whether IP-related differences are causes or symptoms of existing inequalities. Thus, women-focused activities within the framework of WIPO’s technical assistance programs for developing countries may be the most effective approach. So, the plan is to help women use IP tools more effectively, which is both right and smart in terms of poverty reduction and economic development goals.
WIPO’s activities target primarily women inventors and entrepreneurs – who already have some power/education – to help them compete in the marketplace. WIPO cooperates with women’s NGOs, which are already relatively well organized, though IP awareness is still generally low. Gender-specific statistics about IP use and ownership are spotty and limited, but the available evidence suggests that women still underutilize IP and represent a minority of IP owners. Some sort of “affirmative action” is appropriate.
Another possibility: IP awareness raising among women who make traditional crafts. WIPO has a project with indigenous women in Panama, which has a sui generis law for protecting traditional knowledge. Panama sees the project as a way to publicize this new law, with money from the Interamerican Bank. Objectives: both poverty reduction/community development and social recognition of the crucial role women play in creating and preserving traditional art and handicrafts. A separate objective is the preservation of traditional arts and handicrafts.
Challenges: answer the “why only women?” question – why not invite everyone? Because mostly men will show up. Indigenous women suffer from discrimination by indigenous men, who won’t necessarily tell women about the seminars or share what they learn, so women have to be invited specifically. Indigenous boards, running in parallel with the government, control the labeling of indigenous goods, but they’re run by men and women need permission to use the labels. Men need to be coopted as well.
It is important to use examples and objects to raise awareness and build capacity about this highly technical subject – Lom shows them an object that’s labeled with its geographic origin, a trademark, and a story about the producers, and explains that tourists will pay more when a product has such labels. IP isn’t just for the rich and powerful; Lom focuses on accessible IP, like TM rights, and asks “why sell cheap when you can sell expensive?” There are success stories, such as the Inuit/Canadian Igloo certification mark and the Maori/New Zealand Toi Iho certification mark.
Amita Dhanda, NALSAR University, Hyderabad, India, Creative Recipes: Gendering the IPR Teaching Program at NALSAR University: Ghettoizing the gender/woman question is a problem. When we talk about mainstreaming gender, though, we want to avoid malestreaming. Sometimes we find that principles of mainstreaming never translate into practice.
We need to zero in on specific utilities of engendering the curriculum so that we as teachers can answer pedagogical questions: what learning objectives are we trying to fulfill? Symbolically: add women and stir, ask what this field of law has done to women? Many of us are skeptical about this, but it can start interrogating the system. But it can also prevent a more radical approach – we are addressing gender, what more do you want? Better: structural integration of gender analysis into curriculum.
So, what does this have to do with IP as the second enclosure movement? If you are concerned with marginalization and exclusion, then feminist jurisprudence is the way to go. How do the norms and practices of IP law contribute to oppression and exclusion? How can they be changed?
The existing course structure: Familiarizes students with key concepts of IP statutes and their judicial interpretation, equips students with skills to navigate the field, and gives critical scrutiny to different interpretations of key concepts (what is enough to constitute authorship?), but the foundational premises of the field are accepted without question.
Engendering strategies: do a conceptual model inspired by the history of ideas, discussing, e.g., the construction of individual authorship. Employ controversy for pedagogy: drug pricing and patents; anonymous and silenced authors; GIs and collaborative creation. Each issue forces students to grapple with multiple perspectives and interests.
Pedagogically, readings should be selected for inclusion if they’re informative, explanatory, challenging, problematizing, analytical; excluded if they’re evangelical, polarized, or ostensibly balanced. Advocacy writing is good, but not in the classroom.
Teaching methodology: decenter expertise, give primacy to experience. This can challenge the hierarchical perception of intellectual activity in IP law with a feminist belief in the knowledge-creating capacities of all people, including students. Collaborative class exercises, at the end of which you ask the students how much their fellow students’ contributions mattered and who should be deemed an author. Don’t just have faculty members write articles, but have students participate.
Student contributions: Students can conduct research on unmonetized creativity, such as recipes, embroidery designs, rangoli, etc. that subsist in family settings. How does creative activity contribute to family well-being? This makes students aware of creativity that we don’t even notice, let alone reward with IP rights. Does this mean that creation is its own reward? Or does this justify expanding IP law to cover property within the family?
Many people in the academy accept the necessity of gender analysis, but do not actively seek to perform it or do not have the tools to do so. Thus we must continually explain to our colleagues how gender can enrich our understanding of justice, and create tools to help teachers use gender in their classes.
Friday, March 23, 2007
Gender & IP, Panel 1 Q&A
Ann Bartow: Deere case involves the infantilization -- gaying up -- of a masculine icon. Does the analysis work a different way when the brand identity is masculine?
Farley: She wants to distinguish between “brand” generally – brands that qualify for dilution protection – and individual brands. Main proponents of dilution protection represent “masculine” brands, but are still using the metaphor to Congress that their brands are vulnerable to predation. The metaphor can be flipped in individual cases when a masculine brand is feminized by a competitor. (I have a collection of Marlboro parodies; almost none of them involve feminization or sexualization, except for the Brokeback Mountain one.)
Burk: The right of publicity also might create similar issues – slash fiction, etc.
Diane Zimmerman: Defamation can be further unpacked – presumed damages was a special doctrine of slander, not defamation generally. There were three exceptions where you can presume damages – the idea was that these were especially serious harms and we didn’t want to disfavor slander as we did in the ordinary case.
Farley: Sure, but women who could prove they lost marriage proposals could recover without using the exception. It’s women who lost dinner invitations who had to rely on the presumption.
My comment: Perhaps ironic that Farley now uses the comparison with defamation of women to say that this isn’t really a big deal. Feminist critiques of tort law, as Burk mentioned, have emphasized recognition of relational, non-market harms as legitimate.
Farley: Brands are putting themselves in situations that should weaken them, but aren’t – they’re spreading to many products, changing over time. If dilution law is supposed to fix a meaning and keep it in control, TM owners’ activities are deliberately weakening that control but asking for legal protection so no one else can do it.
Me: What’s the difference between that and “an unchaste women can’t be raped”?
Farley: For brands, that’s not justified. (I entirely agree. That we should take account of non-market harms and harms that have been denigrated because they’ve primarily been suffered by women does not mean that we should take account of every possible perceived harm. Brands aren’t women, because they’re not people. They have no moral claim to relational protections. I shouldn’t break a person’s leg; I have no such obligation to a chair.)
Radin: Capture of rhetoric – tarnishment, piracy, property – is a way to win a battle through labels. The gendered way of characterizing brands is a form of rhetorical capture. Also, law and economics analysis can produce similar results in a very masculinized way.
Farley: Dilution doesn’t pull any heartstrings; there’s been a lot less judicial resistance to tarnishment, which has that rhetorical capture. A lot of successful blurring cases involve misappropriation, but we didn’t adopt that characterization of dilution in law. We’ve imported it a bit from abroad.
Josh Sarnoff: Can we think about incentives/patents as quid pro quo in relation to Burk’s and Silbey’s papers?
Silbey: In the case she discussed, the attorneys were actually accused of malpractice from putting the wrong people on the patent – distorting the proper incentives.
Separately, one thing that drives Silbey crazy about tarnishment cases is that judges find it so obvious what’s tarnishing about Debbie Does Dallas when the Dallas Cheerleaders are already heavily sexualized/gendered. The fact that they find it so obvious shows gender ideology at work, and we should work to force them to justify themselves.
Burk: The legitimacy of commodifying some kinds of sex, but not other kinds – you can’t sell sex, but you can sell Cheerleaders posters. Victor’s Little Secret is bad, but Victoria’s Secret Angels are fine.
Farley: Because there’s no foundation for dilution, it invites that sort of analysis.
Silbey: There is a there there – ideologies of gender and power. From the dominant perspective, Victor’s Little Secret is worse than Victoria’s Secret Angels. We need to make our decisionmakers admit what they find acceptable and what they don’t.
Q: Women students have said: they shop at VS all the time, and they see VS’s messages about women and sex as very different from the messages sent by Victor’s Little Secret.
Q: Rape law – reputation shouldn’t be part of it, but it is the case that “good” women are protected where “bad” ones aren’t. One kind of woman needs to be protected, and therefore another kind needs to be abandoned.
Farley: Dilution works by protecting a brand whatever she’s wearing. (And again, that makes me think better of dilution. But it’s the metaphor – brand as person, specifically woman – that is generating that sympathy, which is its evil power.)
Q: Also a reaffirmation of whiteness in these cases.
Bartow: Back to Dallas Cowboys – this isn’t a case about the Cheerleaders as a product, but about the Cowboys – the brand the court was worried about was the Cowboys, that people might think they had slutty cheerleaders. It was about a masculine brand!
Farley: Absolutely, this was about a male owner’s property.
Silbey: Of course, gender ideologoy is always there when we discuss men.
Gender & IP, Panel 1
Ann Shalleck, WCL, introductory remarks: We have to change the conference name to “mapping the connections.” As Google reminds us, there are lots of ways to map territory. These papers point out connections that seem obvious once they’re identified; what’s amazing is that the gender aspects have remained suppressed for so long. Dan Burk, for example, discusses the gendered characteristics of the isolated inventor and the isolated invention. Jessica Silbey uses concepts of origin myths – think of “conception” and realize this has something to do with gender, which she explores through narrative theory. Christine Haight Farley looks at trademark law’s concept of branding as feminine, and the analogies between dilution and the 19th century tort of damaging women’s reputations, which was a tort for violating a property right of the man who controlled the woman (husband, father).
Dan Burk, Minnesota, Do Patents Have Gender? Earlier version summarized here. He begins with the light bulb, invented by Edison, one of the most iconic inventors in the mythos of innovation. Edison was working in an incredibly crowded field of prior art. People were using most or all of the elements he combined in the light bulb. But we never hear about that in the iconic narrative. We also know that Edison had an enormously skilled staff – physicist/mathematician, self-taught scientist, master craftsman, Swiss mechanic (without whom Edison shut down the office), electrician, others. And there were others involved – a lawyer who worked on the patent, found financing, managed personnel, saw the potential of electric lighting, lobbied government for tax breaks, etc. Without his input, the light bulb wouldn’t have existed, but he’s not an inventor.
None of this fits with the legal fiction of the PHOSITA, which defines both the inventor and the invention – an inventor is by definition a person of extraordinary skill in the art, who saw something that wouldn’t be obvious. Compare to the feminist critiques of the “reasonable person” in tort law, who is actually the “reasonable man” (who kills over adultery, lets you drown even when saving you wouldn’t be risky, and is autonomous and separate). Feminist tort standards emphasized responsibilities, communities, standards of care.
Thinking of PHOSITA in the same light, the same assumptions are built in. The inventor is in splendid isolation from everything but a rarefied conception of prior art, without Edison’s interactions with lots of people, including those working on the same problem. PHOSITA seeks to overcome the prior art, not to rely on it.
Feminist concepts challenge patent’s ways of knowing, encouraging us to look at situated knowledge and at IP responsibilities rather than just IP rights. This could go beyond patent misuse to other obligations to the community, recognizing both the contributions of the inventor and the contributions of the community.
Jessica Silbey, Origin Myths: The Mystical Beginnings of Intellectual Property Law: This was a great presentation, much enriched by the interaction between the oral portion and the complementary/contrasting images on the slides. My written summary can’t do it justice.
Silbey offered a cultural analysis of IP – IP can be understood by means of a narrative explanation for the structure and justification of IP, built in part around gendered heuristics. That the heuristics are unspoken and understood makes them powerful. The gender ideology is implicit and behind the scenes, and it’s also not the whole story, but it’s related to systematic disadvantages.
Julia Levy’s story: This begins with a patent arising out of collaboration between Mass General Hospital & another hospital and a small Vancouver biotech firm, creating a new drug for treating macular degeneration. It’s a multibillion-dollar drug now sold by Novartis. It’s photosensitive, activated by light – it only activates when you shine a laser light on the affected body part. The inventors assigned ownership rights to institutions. Levy’s company wanted exclusive rights, and the company QLT was going to pay a royalty. MGH made a deal, but the other hospital didn’t, and sued. Because the parties were joint owners, each could make and sell the product without the others’ consent, so the other hospital had to show that QLT wasn’t legitimately on the patent. And that meant showing that Julia Levy, of QLT, wasn’t a real inventor.
Task: tell a story how Levy was a joint inventor who shared in every aspect of the invention. But in a world of collaborative research, in which people contribute without working in a lab together, the world is changing. Inventors aren’t solo mad scientists. How can patent law recognize these realities? The judge and jury might be preoccupied with the mad scientist, even though the patent law has been amended to reflect modern realities. The “a-ha!” moment that only a single person can experience – “conception,” the formation in the mind of an idea – also a gendered concept. Reduction to practice is important, but the mental event is key – this is an origin story. But what of labor? (Here she refers to the reproductive sense as well.)
Origin stories explain where we come from and give us guidance about where we go. IP laws exist to glorify moments of authenticity, discovery, etc. As litigators, Levy’s lawyers needed to give a mythical origin to the drug in her mind.
Origin story here: When Julia was a young girl growing up in British Columbia, she spent summers playing in cow parsley, and noticed that her skin was more susceptible to sunburn. She discovered the oil was photosensitive. When she became a biochemist, she wondered if its properties could be used in medicine. When her mother developed macular degeneration, she searched for ways to treat it by targeting the small blood vessels of the eye, and combined the concepts. She was a real inventor.
Most origin stories are political, describing how societies or communities came into being and naturalizing certain heirarchies. Origins essentialize, making identity permanent, unalterable and eternal. Levy’s story is also political – justifies a particular hierarchy of people. It legitimates what would otherwise be perceived as inequities in putting her on the same patent as people who labored for years on operationalizing the insight into a drug that could actually treat patients. She contributed to only two claims of a patent with more than a dozen. The hospital’s claims of exploitation and unfairness can only be rejected by finding Levy to be more entitled to rights.
The hospital also signed statements under oath of shared inventorship – like a marriage contract. The argument here is that if bad things happen (like women being more likely to be poor, and children with single mothers living in poverty), that’s a natural result of an equal starting point. Just because the hospital expected better – just because it was a small teaching hospital that trusted the big biopharm company to treat it right – is no reason to intervene on its behalf. The hospital lost its common-law claims of fraud and coercion. This is one aspect of origin stories: they tend to disguise the violence at the beginning of a relationship.
The origin myth of IP is also a myth of citizenship – rights go only to the special who deserve them. In patent, an inventor; in copyright, an author; in trademark, a person who produces more choice for the consumer. But this naturalizes a system of power relations, where consumers are not free from the marketplace, even as the origin story makes us think that we’re freely engaging in unmanipulated transactions.
Consider who benefits from recent changes in IP regimes. First-to-file proposal for patent (big pharma), term extension (Disney), dilution (big TM owners). More naturalization of power? We need to investigate the justifying stories and the heroes of those stories.
Christine Haight Farley, The Feminine Mystique of the Brand in Trademark Law Today: Here’s my report on her earlier talk at Thomas Jefferson. The object of TM law’s protection is changing – from the product/service to the brand. The brands are the product – or even the cultural identities associated with the brands. And the brand is feminine.
Summary of her underlying argument: Dilution law is radical and wrong. Shifting from protecting the consumer to protecting the brand goes along with a shift from tort to property, with lots of costs to speech and competition. There’s no real harm that needs to be addressed.
So why would we have a radical change in TM law without a real threat? Because TM owners cried that their valuable brands were vulnerable to the attentions of bad actors.
In defamation law, people are generally required to put a dollar value on harm to their reputations. If people can do that, why can’t brands, which are valued all the time? Yet in dilution cases, companies can’t put a dollar value on harm suffered – Farley says it’s because they haven’t actually suffered any harm (e.g., Pentium processors have suffered no harm from Pentium real estate). There has been an exception to the defamation rule: historically, women couldn’t prove economic harm from defamatory statements about chastity, so the law didn’t make them do so.
Victorian premises of that tort map on very well to dilution. Women are vulnerable; brands are vulnerable. Women’s reputation is men’s valuable property, just as brands are valuable property. The value of the reputation was in purity, which carries over to brands today – purity of meaning, unencumbered social meaning. The harm to women wasn’t market-based but relational and associational, and that’s what brand managers argue now about dilution injuries. Harm is inevitable: if you talk about a woman’s chastity, you harm her; if you create associations with a mark, you harm it.
Marks are in fact very strong – they have strong legal protections without dilution, and they have very high values. But they aren’t invincible.
One irony: treating overly sexed brands like Victoria’s Secret as Victorian prudes. They’re ubiquitous, but you can’t touch them. They’re selling sex, but you can’t buy it. Lots of dilution cases involve sexually offensive uses – “lewd, immoral and unacceptable,” according to Starbucks in its attack on the “Consumer Whore” parody.
AU’s Washington College of Law, 4th Annual IP/Gender Symposium
Introductory remarks by Margaret Jane Radin, Princeton University: She was always uncomfortable with “Women and the Law,” thinking that gender issues should be broadly integrated into the curriculum. Today, the “Unmapped Connections” between gender & IP may be more mapped than when this symposium started, but there are still many exciting insights to come.
Five areas explored by today’s papers: (1) IP and the feminist approach to law teaching/gender in the curriculum. (2) IP and feminist cultural iconography – the cultural reification of “femininity” and the propertization that undergirds the gender heirarchy. Trademark is particularly on point in cultural iconography. Mattel has contributed, perhaps unwittingly, to a lot of feminist analysis.
(3) IP as it affects women in traditional societies and developing countries, because of their existing position – a potential for disempowerment as well as empowerment. Many modes of women’s creativity don’t lend themselves to individualistic identification of sole authors. (4) An unmapped field: IP and women’s modes of perception and communication. Do women actually have different modes of thought and creativity? If so, is it cultural? Neurological? Should we care? Anonymous creation isn’t eligible for IP in current forms. IP’s emphasis on the visual could also affect the gender of IP rights.
(5) IP and feminist philosophical methodology – individualistic “versus” relational, logic “versus” narrative, and so forth. Radin thinks that feminist philosophy is related to the American pragmatists like Dewey. If we talk about IP this way, we start to question concepts like “the author” versus cooperative creation, PHOSITA, “the invention” in an inventor’s head versus cooperative evolving innovation. Questions of “plain meaning” of statutory text in patent law also have gender implications.
Finally, these papers reflect feminist political activism – consciousness-raising, community-building, inclusion rather than exclusion.
Thursday, March 22, 2007
ACLU v. Gonzales
Two notes about the opinion:
1. The court relies in part on the unlikelihood of many prosecutions actually occurring under the law, because it's just not that important compared to other Justice Department priorities, to determine that COPA will not be more effective than less restrictive alternatives (finding of fact 30). I don't recall seeing an enforcement-frequency test for effectiveness before; I'm not sure how the court should weigh it if Justice crossed its heart and swore to enforce the law; and the reasoning seems inconsistent with the basic chilling effect argument that gets the law struck down.
2. Another novelty, this one presaged by earlier opinions in the case: COPA covers all minors under 17, which means that material could be banned if it's obscene and lacks value for 5-year-olds. The court acknowledges that the Supreme Court upheld similarly worded restrictions on face to face transactions. But the court discounts those cases because, at the Kwik-E-Mart, the chilling effect is lessened by the fact that it's easy to screen out the youngest kids for whom the most is obscene. But on the internet nobody knows you're a 5-year-old, so the chilling effect of restrictions on internet speech is much greater.
This reasoning seems much more solid than point 1, and yet I wonder about "the internet is different" rationales -- even when they favor First Amendment claims. Does this mean that it's okay to prosecute comic book store employees for handing out free comic books to kids, because they should have known better? Not all free speech takes place on the internet -- and internet access is far from universal.
1. The court relies in part on the unlikelihood of many prosecutions actually occurring under the law, because it's just not that important compared to other Justice Department priorities, to determine that COPA will not be more effective than less restrictive alternatives (finding of fact 30). I don't recall seeing an enforcement-frequency test for effectiveness before; I'm not sure how the court should weigh it if Justice crossed its heart and swore to enforce the law; and the reasoning seems inconsistent with the basic chilling effect argument that gets the law struck down.
2. Another novelty, this one presaged by earlier opinions in the case: COPA covers all minors under 17, which means that material could be banned if it's obscene and lacks value for 5-year-olds. The court acknowledges that the Supreme Court upheld similarly worded restrictions on face to face transactions. But the court discounts those cases because, at the Kwik-E-Mart, the chilling effect is lessened by the fact that it's easy to screen out the youngest kids for whom the most is obscene. But on the internet nobody knows you're a 5-year-old, so the chilling effect of restrictions on internet speech is much greater.
This reasoning seems much more solid than point 1, and yet I wonder about "the internet is different" rationales -- even when they favor First Amendment claims. Does this mean that it's okay to prosecute comic book store employees for handing out free comic books to kids, because they should have known better? Not all free speech takes place on the internet -- and internet access is far from universal.
Wednesday, March 21, 2007
Self-promotion
Because really, what's a blog for?
Gone in 60 Milliseconds: Trademark Law and Cognitive Science, 86 Texas L. Rev. (forthcoming 2007). Email me if you want a copy of the current version.
Gone in 60 Milliseconds: Trademark Law and Cognitive Science, 86 Texas L. Rev. (forthcoming 2007). Email me if you want a copy of the current version.
KinderStart v. Google dismissed
Eric Goldman posted about the KinderStart dismissal. He will have more to say, but I wanted to do my “news for storage jars” version about the false advertising aspects of KinderStart’s claim against Google. KinderStart alleged that false statements to consumers and the SEC were part of Google’s anticompetitive conduct; the court found that the complaint’s allegations didn’t overcome the presumption that false statements have a de minimis effect on competition in an antitrust context. Google’s statements that its search results were objective, the court thought, “almost by definition cannot be ‘clearly false’” and would be more readily understood in the context of Google’s promise that it does not accept compensation for placement in results.
Although KinderStart wasn’t specifically given leave to amend its complaint to add the new Lanham Act claims, the court considered them on the merits. As I suspected, KinderStart lacked standing to complain about Google’s representations of objectivity. It alleged harm from Google’s manipulation of search results, not from Google’s claims of objectivity. (I would explain it slightly differently – its harm was suffered as a website, not as a search engine competitor who lost customers because Google fooled people into thinking that it was a better search engine than KinderStart.) Moreover, the court found that representations about PageRank are not made in “advertising or promotion” as required by the Lanham Act.
KinderStart’s state unfair competition claims suffered similar fates. Aside from allegations of unfairness and deception that duplicated the rejected federal claims, KinderStart failed to identify any way in which Google’s AdSense agreements were deceptive. The agreements wouldn’t lead anyone to believe that participation in AdSense would prevent removal from search results or downgrading of PageRank.
Finally, the court rejected KinderStart’s defamation and libel claims based on Google’s assignment of a PageRank of zero to KinderStart’s site, allegedly a representation that the site was worthless. The court accepted Google’s characterization of PageRank as opinion. From materials incorporated by reference in the complaint, it was clear that Google does not represent PageRank as an algorithmic fact untouched by human intervention. Moreover, because KinderStart didn’t adequately allege malice, Google was entitled to immunity under the common interest privilege. That privilege allows Google to communicate information at the request of an interested person, as long as it does so without malice. To see a PageRank, a user must install Google’s toolbar (or have it installed for her), activate the PageRank feature, navigate to a particular website, then rest her cursor on the PageRank icon on the toolbar. Under those circumstances, Google’s provision of PageRank is a response to a request from an interested person. (Back when I used the toolbar, I recall PageRank displaying automatically, but I’ll accept that’s not the current configuration.)
Tuesday, March 20, 2007
Sweetness and power
Merisant Co. v. McNeil Nutritionals, LLC, 2007 WL 707359 (E.D. Pa.) Merisant makes artificial sweeteners, including Equal, NutraSweet and Canderel (the international version of Equal). Equal is made with aspartame, dextrose and maltodextrin. McNeil makes the artificial sweetener Splenda, made with sucralose, maltodextrin and dextrose. Sucralose begins with sugar, then replaces three of eight hydroxyl groupings on the sucrose molecule with three chlorine atoms. Splenda doesn’t contain unaltered sucrose.
Makers of artificial sweeteners have attempted to avoid using certain language, such as the term "artificial," that may convey negative taste or health safety concerns. Instead, the industry uses the term "no-calorie sweetener"; some manufacturers position their products as “like” sugar, by using images and words to evoke sugar in their ads.
McNeil has spent $235 million from 2000-2006 to develop Splenda’s brand identity capitalizing on Splenda’s sugar origins. Thus the catchphrases “Made from sugar, tastes like sugar” on product packaging and “Made from sugar so it tastes like sugar” on individual serving packets, a slogan repeated in all TV and print ads. Perhaps because of this positioning, Splenda is now the top-selling no-calorie sweetener in the US.
Merisant was aware of the taglines since Splenda’s September 2000 launch, but it didn’t conduct any research about whether the slogan was misleading. Instead, it raised informal concerns with McNeil through correspondence arguing that the tagline was inherently false and misleading because it implies a more natural origin and because there’s no causal relationship between the original sugar molecule and the resulting sugar-like taste of sucralose. McNeil rejected Merisant’s concerns, responding that Splenda had never been promoted as “natural.”
In fall 2004, Merisant concluded that Splenda’s marketing was likely to cause consumer confusion and sent a letter to the Better Business Bureau’s National Advertising Division. Rather than responding directly, McNeil filed a complaint in Puerto Rico seeking a declaratory judgment that its advertising was legitimate. Through procedural maneuvers, that led the parties to this court. Merisant alleged false advertising under the Lanham Act and Pennsylvania state law. Specifically, Merisant claims that (1) “made from sugar” is literally and impliedly false; (2) “made from sugar so it tastes like sugar” is literally false and misleading; (3) the implied claim that Splenda is natural is misleading; and (4) the implied claim that Splenda contains sugar is misleading.
The court refused to grant summary judgment in favor of McNeil based on laches. The Lanham Act has no limitations period, so courts borrow from coordinate state statutes, here Pennsylvania’s consumer protection law, which has a limitations period of six years. Because Merisant sued within the limitations period, McNeil bore the burden of showing inexcusable delay and prejudice. There were reasons one could find both. Four years is a significant amount of time in this context, especially for a large company launching a new product; a four-year delay could be severely prejudicial. Yet Merisant also had evidence in its favor. It might not have been obvious that consumers were deceived at first; McNeil’s advertising eventually dropped the initial qualifier “but it’s not sugar”; Merisant was not the direct target of comparative advertising and had less reason to act than if it had been targeted. Moreover, of the $235 million McNeil spent promoting Splenda, $110 million was spent after Merisant began its suit. Merisant wasn’t bound to rush to court in the early stages of a product promotion, when it wasn’t clear what McNeil’s ultimate ad strategy was and when it might not have been clear that consumers were deceived.
Moreover, consumer protection concerns could tilt in Merisant’s favor. Though there’s no argument that Splenda is unhealthy or unsafe, it’s important to consumers to know whether the foods they buy contain sugar or are “natural.” And deliberate attempts to deceive consumers could also disqualify McNeil from a laches defense. There was some evidence from which a jury could conclude that McNeil intended to deceive, including an independent consultant’s description of McNeil’s “carefully considered decision[]” to “position[] Splenda as ‘not artificial.’” McNeil also stopped testing whether consumers received the message that Splenda was not artificial “for legal reasons,” which could lead to a negative inference.
Given all these uncertainties, it was for a jury to decide whether Merisant’s delay was inexcusable and McNeil was prejudiced.
McNeil argued that “made from sugar, tastes like sugar” is literally true, unambiguous, and not capable of being misleading. It made the usual claims that Merisant’s survey questions were leading, which the court refused to accept at this stage, and also invoked the pernicious rationale of Mead Johnson Co. v. Abbott Laboratories, 201 F.3d 883 (7th Cir. 2000), that surveys shouldn’t be used to define words, here “from” in “made from sugar.” Mead, among other things, invites confusion over whether there’s some sort of intent standard in Lanham Act false advertising cases, distinguishing “factual propositions that are susceptible to misunderstanding” from statements “designed to mislead.”
The amended Mead opinion at 209 F.3d 1032 (7th Cir. 2000) backtracks from this standard, but doesn’t quite do the job. Notably, the district court here didn’t cite the amended opinion in Mead, but only quoted the “designed to mislead” language that was amended out. The court went on to hold that “[t]he decision whether to follow Mead Johnson may turn on whether ‘made from sugar’ is merely ‘misunderstood’ or whether it was deliberately designed to be misunderstood and, hence, to mislead.” Given that Mead Johnson isn’t binding in any event, the court could look to the superseded language, but it should acknowledge that’s what it’s doing – and should explicitly address why it’s abandoning the usual Lanham Act rule that intentionally misleading conduct is not required.
McNeil’s position was that a consumer couldn’t interpret “made from sugar” and “tastes like sugar” as “is sugar.” Analogously, a survey couldn’t be used to prove that “Made in America” is misleading because it’s perceived by consumers as meaning “made by well-compensated union workers.” But, the court reasoned, there could be a legitimate dispute over whether Splenda was “made in America” if the sugar cane used was grown in Louisiana but then shipped to Mexico for conversion into Splenda, then returned to the US for packaging. Though McNeil had strong arguments about what “made from sugar” couldn’t mean, it was less convincing about what it could mean to consumers, specifically whether they could be misled about the naturalness of the “making.” If either (1) McNeil acted intentionally, or (2) consumers were confused about more than the meaning of “from,” then the court would decline to follow Mead.
McNeil also raised an affirmative defense of unclean hands, alleging that Merisant had engaged in similar marketing techniques to emphasize its products’ “natural” components. The key examples: For Equal, Merisant highlights the fact that aspartame is made “by joining two amino acids naturally found in wholesome foods like milk, meats and grains,” which are “foods we eat every day.” For NutraSweet, Merisant claims that “unlike saccharine, NutraSweet is the sweetener your body treats naturally.” For Same with Sugar (available in Puerto Rico), Merisant uses packaging that states “made with sugar” and uses images of sugar cane fields even though, McNeil argues, sugar serves only as a bulking agent.
The unclean hands defense requires clear, convincing evidence of egregious misconduct that injured the defendant and that has a close nexus to the subject of the plaintiff’s action. McNeil was hampered by its insistence that its advertising, as well as Merisant’s, was just legitimate product positioning, which made it hard to argue that Merisant’s conduct was “egregious.” As the court pointed out, unclean hands “is not a mere ‘they did it too’ defense, but instead serves as a shield against a plaintiff's claims when the plaintiff has engaged in ‘egregious misconduct.’” Moreover, McNeil’s key examples of Merisant’s advertising claims were in fact true. For example, Same with Sugar is composed of 97.5% real sugar, and thus “made with sugar” is not misleading.
The court excluded evidence of Merisant’s outside-US conduct, based on McNeil’s resistance to discovery on McNeil’s outside-US conduct; if it’s irrelevant to one side of the case, it’s irrelevant to the other. But it did comment that Merisant’s Mexican “Canderel Nature” was likely to be understood as meaning “natural” even though “nature” isn’t a Spanish word. The Spanish word for “nature” is “naturaleza,” and for “natural” is “natural.” Even without evidence, the court expected that the average Spanish-speaking consumer would associate “nature” with the Spanish equivalent. By Merisant’s logic, it could sell an artificial sweetener in Mexico called “Sugar” or one in the US called “Azúcar” (sugar) without being misleading. This, the court felt, overlooked the “shrinking” world in which a nation’s consumers often use more than one language. (Trademark deals with this problem through the doctrine of foreign equivalents, which is usually used to prevent registration of terms that are generic in foreign languages, but would also apply to terms that are deceptive in foreign languages.)
In any event, the court found that the nexus between Merisant’s conduct and its claims were too attenuated to apply unclean hands. The entire artificial sweetener industry wants to avoid the perception that its products aren’t natural, but Merisant’s claims were specifically that McNeil’s ads are misleading because they lead consumers to believe that Splenda contains sugar or is more natural than competing products. “There is a difference between highlighting the ‘natural’ aspects of a product and actually attempting to imply (falsely) that a product is, in fact, natural or made from an ingredient found in nature.” Thus, it granted summary judgment against McNeil’s unclean hands defense, though McNeil might be able to present the relevant evidence for other purposes, such as damages.
Sunday, March 18, 2007
Advertising injury policy coverage for counterclaims?
Landmark American Ins. Co. v. Ray, 2006 WL 4092436 (W.D. Tex.)
The Scooter Store sued Ray, who was doing business as the Scooter Warehouse, for trademark infringement and dilution and false designation of origin. Ray counterclaimed for trademark infringement and false advertising, and won a substantial settlement. (Apparently the Scooter Store advertised a “free scooter,” but the actual terms made this unlikely, and FBI and IRS investigations into the Scooter Store’s practices “changed the tone of the [settlement] negotiations.”) Ray also notified her insurance company, since her policy covered “advertising injury,” and the insurer agreed to provide a defense subject to a reservation of rights, preserving its ability to raise coverage defenses. Ray had retained her own counsel, and the insurance company was content to provide second-chair support. After the underlying litigation ended, Ray sought reimbursement for her attorneys’ fees.
The court found in her favor for fees accrued after the insurer was given notice of the claim. Because the insurer offered to defend pursuant to a reservation of rights, Ray was entitled to choose to defend the suit personally, with the insurer liable for her attorneys’ fees, although Ray’s failure to explicitly reject the offered attorney was troublesome. The insurer’s designated attorney spent most of his time reviewing the other attorneys’ work, and he did not dispute Ray’s attorney’s role as lead counsel. Thus, the court found that the insurer’s behavior was inconsistent with a rejection of any obligation to pay Ray’s attorney.
The real issue, then, was how much the insurer had to pay. Ray argued that the insurer should pay essentially all the fees, since the offensive and defensive issues of who, if anyone, was an infringer were substantively and strategically interrelated. The court agreed in part, finding that the insurance company had to pay all the pure defense-related fees – only a few hours’ worth – and half of the other fees that could not be allocated to the false advertising claims (as all the expert-related fees were). The insurer argued that the award should be offset by Ray’s settlement with the Scooter Store. But, since the court didn’t award any fees related to the counterclaim, it refused to find any setoff amount.
Saturday, March 17, 2007
Nationwide coupon settlement upheld in cold sore case
Intervention, Inc. v. Avanir Pharmaceuticals et al., 2007 WL 772889 (Cal. App. 1 Dist.)
This was an appeal by an objector to a settlement of a false advertising class action based on the claim that Abreva, a cold sore medication, cut cold sore healing time in half. The settlement gives $1 million to independent, non-product-related cold sore research and provides 50 million vouchers combining a $3 discount coupon for Abreva with a rebate offer on the purchase price, up to $6.50, of Tums antacid. The coupons will be distributed through newspapers, valid for two years, and may not be accompanied by advertising touting Abreva’s effect on the duration of a cold sore or by phrases like “try Abreva” directed at recruiting new users. Attorneys’ fees were $1.2 million. The objector argued that certification of a nationwide plaintiff class was illegitimate, and that the settlement was inadequate. The court of appeals affirmed.
The case was aggressively litigated through multiple demurrers, motions to strike, and amended complaints. Discovery was extensive, including depositions of class representatives, nine of defendants’ key employees, and over 50,000 pages of document production. Settlement discussions took about a year.
The court of appeals found that California was a proper forum to adjudicate nationwide class claims because the product was developed in California and the challenged research was conducted by Avanir, a company incorporated and located in California. Many of the ad claims, including press releases, emanated from California. The objector argued that another defendant (GlaxoSmithKline), based in Pennsylvania, was the primary wrongdoer. But the class complaint named them both and made substantial allegations of wrongdoing against both. Avanir developed the medication and conducted the relevant clinical studies. The defendants jointly agreed on the marketing plan and press releases.
As to the substance of the settlement, the court of appeals found no abuse in discretion from the trial court’s finding that it was fair, adequate and reasonable. A presumption of fairness operated: the negotiations were conducted at arm’s length, assisted by a mediator, and concluded after extensive discovery; class counsel was experienced in class action litigation; and there was only one objector out of a nationwide class estimated to exceed one million. Moreover, the trial court found that the coupon provided a benefit to class members who’d be otherwise difficult to identify and reach. The $1 million research fund was a significant benefit to the class, given that cold sores often recur. The settlement didn’t provide injunctive relief, but the relevant ads had been off the market for years, and the court of appeals agreed that there was no reasonable basis to believe that defendants would resurrect an old campaign based on a decade-old study that had been publicly criticized in litigation.
The opposer, perhaps relying on research revealing very low rates of coupon and voucher usage, argued that direct restitution should have been provided instead. But it would have been extremely difficult to find the class members, given that Abreva sells for less than $20 and that consumers would have to have kept records back to 2001 to qualify for reimbursement. Administration costs would overwhelm direct consumer restitution, so the “modest” benefits of coupons and rebates would be more economically feasible. It’s also true that coupon settlements can work as ad campaigns for defendants, but “win-win” settlements aren’t per se unreasonable, and the settlement here seeks to minimize the promotional effect of the vouchers. In addition, the $1 million research fund benefits the class. The objector argued that the harm to the class came from advertising misrepresentations, not from cold sore outbreaks. But the misrepresentations were about scientific research, and thus independent research is related to the class claims. (Except that the settlement-fund research can’t be product-related, so … not exactly.)
Wednesday, March 14, 2007
Patry on My Fair Ladies
William Patry has a blog post about my article My Fair Ladies here, making several points worth discussing. To begin with, he notes that “[t]he availability of fair use for sexually-themed works has had a mixed reception in the courts,” describing a number of cases – including DC Comics Inc. v. Unlimited Monkey Business, Inc., 598 F. Supp. 110 (N.D. Ga. 1984) [typo of 1994 in his post, which is why I mention it] – that predate Campbell and reject fair use in infringement claims against sexually themed parodies. Campbell, of course, rests its finding of potential transformativeness precisely on the criticism of the woman/women described in the songs and the sexual longings of 2 Live Crew, which Justice Souter imputes to Orbison as well.
I absolutely agree that there is a time element at work: the trend of favoring sexual criticism over other criticism is only a few decades old, and is probably connected to other aspects of the overt sexualization of American society. (There used to be a dispute over whether obscene works were copyrightable, a dispute now resolved in pornographers’ favor.) What my article discusses is the current situation – the fact that today, sexualization of a less overtly sexual work is the easiest and most reliable route to a finding of transformativeness, though it’s not impossible to do it other ways.
Patry takes issue with my characterization of the successive Koons cases – before Campbell, Koons lost two cases (he didn’t transform String of Puppies or his sculpture of Odie), then recently won a case in which he copied a fashion photo and put it into a painting. Post-Campbell, his situation is plainly better, even though his explanations for why he copied are virtually identical in all three cases. I find it especially striking that Koons described the woman’s legs in the photo as “nobody’s legs in particular,” and that the courts accept this characterization of an image of the female body as freely appropriable, whereas pictures of cute dogs are “somebody’s” – the copyright owner’s. Patry thinks the result is explainable on other grounds, because Koons mixed and matched images from lots of sources in the recent Blanch case rather than simply creating a three-dimensional sculpture from a single source and changing the colors, as in the earlier cases. Given the oft-cited rule that no infringer can excuse an infringement by showing how much he didn’t copy, and that transformation into sculpture did require some artistic and conceptual judgments, I am not persuaded.
But the broader point is this: one can, as courts have, find explanations that don’t explicitly rely on sexualization to justify fair use conclusions in the recent cases. But you look at the major transformative fair use winners – the ones we talk and write about, the ones in our casebooks – and you see and hear a lot about women’s bodies. Look at the transformative fair use losers – Dr. Juice, Michael Moore, Honda’s James Bond commercial – and you don’t. A feminist analysis suggests that something more than the formal reasoning in the cases is at work.
Minor point: Patry finds it significant that, in Mattel, Inc. v. Pitt, 229 F. Supp.2d 315 (S.D.N.Y. 2002), “a very sexualized take-off on Barbie,” “the parodist was a woman and the judge was a woman.” I don’t. Women can see criticism in commentary on other women’s bodies, and artists like Judy Chicago represent other women’s bodies all the time. That a female judge found transformativeness in sexualization shows that sexualization is now a readily accepted route to fair use, which is the same thing that male judges’ findings show. The question that led me to write the piece was “Why are so many of our canonical fair use cases about women’s bodies?” I think “why aren’t there more female judges?” and “why aren’t there more female artists/defendants in copyright cases?” are related questions, but they aren’t mine here.
Sunday, March 11, 2007
Do you care where your basketball came from?
Baden Sports, Inc. v. Molten, 2007 WL 703394 (W.D. Wash.)
Baden developed and patented a new game-quality, cushioned basketball. Baden alleged that Molten introduced several basketball models into the U.S. market that copy Baden's patented technology.
Molten advertises its technology as its own innovation, using terms such as “new design,” references to a prominent Italian design company, “innovative proprietary Dual-Cushion technology,” and “[t]echnology that only Molten can create,” which Baden alleged are false claims. Moreover, Baden alleged that Molten imports its balls into the United States without marking the country of origin, constituting a misrepresentation of geographic origin.
Molten moved to dismiss Baden’s Lanham Act claims. Molten argued that it did not copy Baden's technology; rather, its dual cushion technology is an outgrowth of designs Molten developed in the 1960s and 70s. Molten also argued that Baden's patent is invalid because of prior art. The court recognized these as factual issues for further development. Molten then argued that “innovative” and “proprietary” are mere puffery, but the court refused to decide the issue on a motion to dismiss. Given that the main issue in the case is whether Molten infringes Baden’s patent, the subsidiary Lanham Act claim that Molten’s technology is really Baden’s innovation could not be resolved at this stage.
Molten balls ordered through a prominent online store with which Molten has a relationship – the FIBA online store – are concededly not marked with a country of origin. Molten argued that Fan Avenue, a French basketball vendor which rents website space from FIBA, purchases and imports Molten basketballs to Europe, where there are no country of origin marking requirements, and then, in turn, offers those unmarked basketballs for sale over the internet to purchasers throughout the world. Molten argued that the duty to mark falls on the importer, who is the consumer in the case of the FIBA store.
The Tariff Act requires every imported foreign product to be marked to indicate country of origin. But Baden’s claim is under the Lanham Act: failure to mark balls that end up in the US is misleading. Although there’s no affirmatively misleading claim, only an omission, a number of courts have concluded that the omission of a geographically descriptive term is actionable under the Lanham Act in these circumstances. Given the Tariff Act, a failure to mark acts like an affirmative representation of US origin. (Can this be presumed material? My answer is yes because of the Tariff Act and the motivations for it, and the intriguing question is whether the presumption can be rebutted, even though it's illegal to fail to mark foreign origin.) Thus, the court refused to dismiss the claim, but noted that Molten’s responsibility for the misrepresentation remained to be litigated as it neither distributed nor imported the balls directly to the US.
Saturday, March 10, 2007
When Lanham Act violations aren't "advertising injury"
Federal Insurance Co. v. Symons Corp., 2007 WL 689679 (Cal. App. 1 Dist.)
Symons lost a large Lanham Act false advertising case, also involving state trade secrets claims. The Lanham Act claims involved misrepresentations of the strength, weight, and relative usefulness of Symons products as compared to its competitor’s. The jury awarded what the judge determined were duplicative damages, so the judge entered an award of $13 million.
Symons sought indemnification under its advertising injury policy. The trial court denied its claim, and the California court of appeal affirmed. The relevant policy defined advertising injury to include “[o]ral or written publication of material that ... disparages a person's or organization's goods, products or services,” or (2) “[m]isappropriation of advertising ideas or style of doing business.” Symons argued that (1) the Lanham Act claims involved disparagement of the competitor’s products, and (2) misappropriation of trade secrets that included marketing information constituted misappropriation of advertising ideas or style of doing business.
The court rejected both arguments. First, in determining a duty to indemnify, a court does not look at the nature of the insured’s conduct that caused the lawsuit, but rather at whether the judgment was entered on a theory actually covered by the policy. Not all negative comments about a competitor or claims of product superiority constitute disparagement, and the Lanham Act is written in the disjunctive, covering false (positive) claims about one’s own products as well as false (negative) claims about competitors’ products. Thus, the jury could have predicated its verdict on a finding that Symons falsely represented its own products. Symons did not meet its burden of showing that judgment was entered on a theory actually covered by the policy.
Second, nothing in the jury’s trade secret verdict necessarily covered misappropriation of advertising ideas or style of doing business. Four of the five allegedly misappropriated trade secrets covered product design or manufacture, while the fifth covered “marketing information, inlcuding … bottom-line cost information”; the jury found misappropriation of all five, but nothing in its verdict showed a causal link between the misappropriation and Symons’s advertising activity.
Takeaway message: Not every advertising injury is an “advertising injury”; insurers will define that term as narrowly as possible, and especially like to exclude core Lanham Act claims for an advertiser’s false representations about its own product.
Symons lost a large Lanham Act false advertising case, also involving state trade secrets claims. The Lanham Act claims involved misrepresentations of the strength, weight, and relative usefulness of Symons products as compared to its competitor’s. The jury awarded what the judge determined were duplicative damages, so the judge entered an award of $13 million.
Symons sought indemnification under its advertising injury policy. The trial court denied its claim, and the California court of appeal affirmed. The relevant policy defined advertising injury to include “[o]ral or written publication of material that ... disparages a person's or organization's goods, products or services,” or (2) “[m]isappropriation of advertising ideas or style of doing business.” Symons argued that (1) the Lanham Act claims involved disparagement of the competitor’s products, and (2) misappropriation of trade secrets that included marketing information constituted misappropriation of advertising ideas or style of doing business.
The court rejected both arguments. First, in determining a duty to indemnify, a court does not look at the nature of the insured’s conduct that caused the lawsuit, but rather at whether the judgment was entered on a theory actually covered by the policy. Not all negative comments about a competitor or claims of product superiority constitute disparagement, and the Lanham Act is written in the disjunctive, covering false (positive) claims about one’s own products as well as false (negative) claims about competitors’ products. Thus, the jury could have predicated its verdict on a finding that Symons falsely represented its own products. Symons did not meet its burden of showing that judgment was entered on a theory actually covered by the policy.
Second, nothing in the jury’s trade secret verdict necessarily covered misappropriation of advertising ideas or style of doing business. Four of the five allegedly misappropriated trade secrets covered product design or manufacture, while the fifth covered “marketing information, inlcuding … bottom-line cost information”; the jury found misappropriation of all five, but nothing in its verdict showed a causal link between the misappropriation and Symons’s advertising activity.
Takeaway message: Not every advertising injury is an “advertising injury”; insurers will define that term as narrowly as possible, and especially like to exclude core Lanham Act claims for an advertiser’s false representations about its own product.
Thursday, March 08, 2007
Another version of My Fair Ladies
You can also find My Fair Ladies on my site, here.
[Edited to reflect that the login requirement at BePress was accidental and has been corrected.]
[Edited to reflect that the login requirement at BePress was accidental and has been corrected.]
Wednesday, March 07, 2007
My new article on fair use and feminism
New publication: My Fair Ladies: Sex, Gender, and Fair Use in Copyright, 15 Am. U. J. Gender, Soc. Pol’y & L. 273 (2007).
Monday, March 05, 2007
Salon's sports writer on the NFL's "Big Game" trademark
King Kaufman has some sensible things to say, though he disclaims any legal expertise.
All I know about the Superbowl is that Sci-Fi didn't show a new episode of Battlestar Galactica that Sunday night because of it, which is already enough to earn my enmity. I await Wal-Mart's opposition to the registration with interest.
All I know about the Superbowl is that Sci-Fi didn't show a new episode of Battlestar Galactica that Sunday night because of it, which is already enough to earn my enmity. I await Wal-Mart's opposition to the registration with interest.
TracFone resellers held liable for DMCA violations
TracFone Wireless, Inc. v. Dixon, -- F.Supp.2d --, 2007 WL 570540 (M.D. Fla.)
In this uncontested case, TracFone achieved an unsurprisingly broad reading of copyright, trademark and unfair competition law against defendants who bought and resold TracFone prepaid phones in bulk. Part of defendants’ conduct was “unauthorized and unlawful” unlocking of TracFone phones, “alteration” of TracFone’s software, and sale of “counterfeited” phones to end users. The fact that the case was uncontested makes it inherently a bad one for legal doctrine, but I’m having a hard time figuring out what was counterfeit about the phones – there is no allegation that these were other than TracFone-manufactured phones.
Likewise, the allegation about software was that the phones were “hacked” to “erase, remove and/or disable” TracFone’s copyrighted software. The court found that this conduct constituted trademark infringement, copyright infringement, and violation of the DMCA, and probably other legal violations as well. I can see trademark infringement if the phones weren’t properly marked as varying from original condition, but erasing, removing, and disabling software doesn’t, as far as I know, implicate any exclusive rights of a copyright owner, any more than my recycling of my old newspapers does.
The court addressed the recent exemption for certain cell phone-related conduct in the Library of Congress DMCA exemption proceedings. Because that exemption allows circumvention “for the sole purpose of lawfully connecting to a wireless telephone communication network,” the court ruled it inapplicable – defendants were circumventing for the purpose of profitable resale, not connection. (I would read the exemption more broadly, since the Librarian made clear that the “sole purpose” requirement is directed at preventing things like circumventing copyright controls on ringtones; the ability to connect to a wireless network is central to the ability to resell the phone. The rulemaking itself speaks of the “consumer,” but also points out that firmware-imposed restrictions on switching networks have nothing to do with the incentives at which copyright is directed, so copyright owners as such have no interest in maintaining firmware locks.)
Intriguingly, the court stated that, because the exemption didn’t apply, the court need not address its validity, suggesting that TracFone had argued in the alternative that the exemption was improperly granted – perhaps a sign of future ligitation strategy against a defendant who chooses to fight back. TracFone submitted untimely comments to the Librarian, which were not considered in the rulemaking (search for “wireless” to find the relevant portions). Possibly TracFone thinks that its failure to comply with the Librarian’s rules justifies relitigating the exemption in court.
TracFone also alleged defendants engaged in fraudulent manipulation of TracFone’s Refer-a-Friend promotion through their websites, which used TracFone’s marks and logo to deceive consumers into thinking they were legitimately associated with TracFone, recruited customers to claim free airtime, then sold the airtime to unsuspecting third parties. The court granted relief on these claims as well; though the court’s laundry list of liability didn’t distinguish between the cell phone resales and the websites, my guess is that the applicable claims were trademark infringement, “domain name misuse” (the ACPA isn’t mentioned, and one of the offending websites didn’t use any variant of TracFone in the top-level URL), and various common-law torts.
Sunday, March 04, 2007
Using photos of competitor's product not unfair competition
Trott's Woodproducts, Inc. v. American Cabinet Doors & More, Inc., 2007 WL 625920 (W.D. Ark.)
Consumer sophistication can stave off confusion. Here’s the unusual case where consumer ignorance prevents infringement, because consumers don’t recognize the existence of a mark.
Plaintiff, which does business as Diamond Doors, sued defendants for false advertising, state unfair competition, false designation of origin, and deceptive trade practices, all stemming from defendants’ alleged practice of using photos of Diamond Doors sample cabinet doors in sales brochures. (One of the defendants allegedly took photos, price lists, customer lists, and manufacturing information when she left plaintiff’s employment. Perhaps plaintiff should institute a non-compete agreement with its employees.) Defendants argue that the pictures are simply pictures of generic types and styles of cabinet doors used throughout the industry.
The court rejected plaintiff’s application for a preliminary injunction, finding that consumers were unlikely to recognize the doors, or the photos, as plaintiff’s trademarks, because it would require extreme sophistication to recognize who made a cabinet just by looking at it. There was no false advertising because the court found no likelihood of material deception; plaintiff’s only evidence was that one of its customers received a brochure from defendants, perceived the brochure as containing photos of plaintiff’s products, and called plaintiffs about it.
The court may have gotten caught up in trademark and overlooked the basic passing off that was allegedly taking place – even if no trademark exists in the configuration of the doors, the representation that these doors represent defendants’ work could be false and misleading, whereas photos of defendant’s exact copies of the doors would be perfectly legitimate. That’s the difference between trademark protection for the doors and general unfair competition protection against passing off.
DirecTV's picture quality may beat cable; its legal arguments don't
Time Warner Cable, Inc. v. DirecTV, Inc., -- F.Supp.2d --, 2007 WL 412498 (S.D.N.Y.)
TWC is the second-largest cable provider in the United States, and the market leader in many places, such as in the areas of New York City in which TWC is the franchisee. TWC offers analog and digital cable, whereas DirecTV is 100% digital. Both broadcast only a limited number of channels in HD format, which requires customers to have HDTV equipment. Neither TWC nor DirecTV set the screen resolution for HDTV programs, but only pass them on to consumers; thus, both TWC and DirecTV have the same picture quality in their HD programming. For non-HD service, analog cable is somewhat inferior to digital cable.
TWC complained about various DirecTV TV spots that made claims such as “You’re just not going to get the best picture out of some fancy big screen TV without DIRECTV” (according to Jessica Simpson) and “settling for cable would be illogical” (according to William Shatner as James T. Kirk). The narrator concluded, “for picture quality that beats cable, you’ve got to get DIRECTV.” Despite modifications to the ads (such as “for an HD picture that can’t be beat, get DIRECTV” as the closing line), TWC was not satisfied and filed suit, challenging the TV ads as well as certain internet banner ads. Those ads show an image divided into two screens, one half clear and labeled “DIRECTV” and the other half an “extremely blurry, highly pixellated and indistinct image” labeled “OTHER TV.” The web ads later suggest that “[i]f you're hooking up your high-definition TV to basic cable, you’re not getting the best picture on every channel. … [f]ind out why DIRECTV's picture beats cable.”
As reported a while back by the Trademark Blog, the court found the ads literally false because, in context, the claims had to mean that DirecTV’s HD was superior to cable’s HD. Because digital HD signals behave the same on both parties’ systems, this is literally false, even though DirecTV might beat analog cable. The case is an application of the rule that ad claims must be assessed in context. The court rejected DirecTV’s dissection of the ad, which posited that “the best picture” and similar statements referred to the overall viewing experience, not the HD viewing experience. Context, as assessed by a court, can convert potential or implicit falsity into literal falsity – a way in which the standard doctrine that only literally false claims can be enjoined without evidence of consumer deception is not entirely accurate.
Likewise, the internet ads were literally false because of the visual exaggeration, which vastly overstated the differences between cable and DirecTV. Under Second Circuit precedent, visual exaggeration can be literally false, despite DirecTV’s claim that it was engaged in mere puffery. It is noteworthy that the court relied on consumers’ lack of experience with HD: Because the technology is new, many people have no understanding of how it interacts with the various systems, and thus “consumers unfamiliar with HD equipment could be led to believe that using an HD television set with an analog cable feed might result in the sort of distorted images showcased in DIRECTV’s Internet Advertisements, especially since those advertisements make reference to ‘basic cable.’” Reasonable consumers might lack the background knowledge necessary to identify the web ads as puffery.
TWC also showed irreparable harm by showing its marketplace dominance in the relevant areas. Explicit comparative advertising raises a presumption of irreparable harm; in a highly concentrated market, the dominant competitor need not be named to suffer the same harm and receive the same presumption.
DirecTV made the increasingly popular argument that TWC’s proposed injunction was unconstitutionally overbroad in that it would suppress non-false commercial speech. The court modifed TWC’s proposed order, but did enjoin DirecTV from disparaging the visual or audio quality of TWC or cable HDTV programming. DirecTV was allowed to state that overall picture quality is superior to that of TWC’s mix of digital and analog. The geographic scope of the injunction was also limited to areas in which TWC provides cable service, though I doubt it makes sense for DirecTV to run two sets of ads (not to mention that the cable market leader in each market could presumably achieve the same result against DirecTV).
Saturday, March 03, 2007
Best Buy isn't
Eric Goldman pointed me to this story about BestBuy’s internal website used at its physical stores, which apparently looks exactly like BestBuy.com, except that it doesn’t have the sale prices that BestBuy.com often has. Sales representatives have apparently used the internal website to convince customers that sale prices were no longer available. The negligence explanation is incompetence: salespeople didn’t know that they had to log on to the external website to see the web sale prices. Whether deliberate or not, this seems to fall within the definition of “bait and switch” under many state consumer protection laws. In a written statement to a reporter, the company said that its price-match policy included matching prices with the BestBuy.com website. This seems like an odd definition of price matching – to provide the advertised price. If it were clear that BestBuy.com was only loosely connected to Best Buy physical stores, maybe this would make more sense, but I doubt the average consumer sees them as distinct.
Thursday, March 01, 2007
Shiffrin tribute: concluding reflections
Moderator: Tamara Piety, University of Tulsa College of Law: Has commercial speech become an empty set, like obscenity, given that most advertising doesn’t say anything you could identify as true or false? People run through fields of flowers, making you desire the purple pill – what is that saying and how do we think about regulating it? (Largely, we don’t – we’ve given up.) Imagine that the positive claims in ads had to be made in tombstone format and the disclaimers and warnings had to be vivid and imagistic.
Also, we tend to talk about corporations as natural beings that just happen to have a particular structure, rather than as a product of law (which is what makes Seana Shiffrin’s perspective so helpful).
Eugene Volokh, UCLA School of Law: There are two ways of applying First Amendment theories – first, does this speech advance the interest we care about? For Shiffrin, does this advance the goal of preventing injustice? Shiffrin says some speech encourages materialism and distracts from justice, and thus should be valued less than other speech. But we might get our evaluation wrong. Volokh thinks that materialism and consumerism promote justice. The countries that have emphasized consumerism have done better than ones that haven’t. We could engage in status competition in other ways, like destructive political battles or hypernationalism or utopian ideologies; compared to that, liking tennis shoes is nicer. It fosters attitudes favoring consensual trade and material improvement for yourself and your family, and usually requires you to acquire skills and habits that make it more likely that other people will want to trade with you. Advertising may not promote justice directly, but it doesn’t hinder it. In fact, desire for equal access for material goods has driven many equal rights movements.
There are different visions of what promotes and prevents injustice. If your theory of First Amendment theories is that courts should evaluate individual types or even instances of speech for furthering the relevant values, you risk serious systematic errors. Don’t ask whether communist speech promotes democratic self-governance, but whether protecting a broad range of speech promotes our values more than giving judges discretion on a case-by-case basis. Sometimes the answer will be: judges should have discretion. But often it won’t be.
Second, Shiffrin said in response to Redish that you can’t just look at one argument against protection, but at the complex of arguments taken together. Volokh argues that, likewise, a lot of the information we get in private conversation, in bits and pieces, ends up being more important to our decisions than political stump speeches. Commercial advertising is another input, whether it’s “buy American” or simply “this is a good car,” which may affect our overall views about automobile regulation. Maybe it’s the aggregate of speech that’s relevant to Theory X rather than a particular ad.
Another question: do we define speech in (protected if within our categories) or out (presumptively protected absent exception)? How open should we be to moving speech in or out? There’s a tendency to overstate the extent to which lack of coverage is uncontroversial, for example on informed consent requirements. A court actually struck down an informed consent requirement on First Amendment grounds. We can’t just assume that professional/client speech is outside the First Amendment. Of course such speech is relevant to the formation of political and public opinion, as when our doctors talk to us about abortion.
The intentional infliction of emotional distress tort, for another example, has been substantially limited on First Amendment grounds, and the remainder is still controversial. Likewise the disclosure of private facts tort, and the public concern test, and other limits/exceptions that we’ve been treating as clear limits on speech.
C. Edwin Baker, University of Pennsylvania Law School: We ought to reflect on the utility and dangers of symbols and images. Shiffrin’s early work was appealing because it offered the dissenter as a symbol rather than the marketplace. Most of people’s examples of valuable speech – opera, State of the Union address – were types of speech that no one is proposing to regulate. So should we find some other core examples? Another notion: suppressing “one side” is wrong. If you can convince Americans that’s what’s going on, you’ve gone far on the way to First Amendment success as a practical matter, regardless of theory.
Another image: The personalization of the corporation as if it were just another speaker, so that General Motors and a car buyer are the same. Are we being tricked about the way the world is? If we imagine Nike as identical to a natural person, then we see “one side” suppressed in Nike, even though any natural person is free to speak out on Nike’s side, and many did.
Criticism of the marketplace of ideas: it doesn’t work. If we were all perfectly rational and had infinite time, maybe discourse would really lead to wisdom. But some groups have more power than others, and what society concludes is powerfully affected by the resources supporters are able to put into persuasion. Given that we don’t even have an idea of what it would be like for a marketplace of ideas to be fair, it’s inadequate as a constitutional metaphor. But we still depend on people making decisions after hearing claims, and that commitment is important to our society and our freedom. This is where social engineering, in Shiffrin’s terms, come in.
How should social engineers think? Look for failures. If hundreds of billions are spent on advertising, how much is spent on promoting “green” or nonmaterialistic values? Even if the latter aren’t the right ones, the question is whether they have a fair shot. How do we empower people to disrupt the status quo that dominates not because of the brilliance of its arguments but because of the resources backing it? The image of the dissenter can help guide us.
Piety: She’s sympathetic to the idea that materialism can be progressive – the creation of a market advertising overtly to gays and lesbians helps legitimize them as subjects. But what about a tobacco company’s idea that women’s liberation means smoking? Consumers often try to avoid ads; why should Philip Morris be able to dictate to me what liberation means any more than the government? At least I voted for government representatives.
Volokh: Why is it paternalistic to advertise to you? I’m saying my view is better than yours, but that’s the essence of persuasion. When the government keeps you from hearing certain views, that’s different.
Why isn’t it disrupting the status quo for Philip Morris to say “screw all this health stuff, smoking is fun”? The very fact that tobacco is restricted makes it a source of dissent. The broader point: to say the marketplace of ideas doesn’t work is hyperbole. Holmes doesn’t say truth will come from the market, but that the best test of truth is its ability to succeed in the marketplace.
Piety: Often true, but consider “green” claims – government institutions may be better positioned to evaluate truth than consumers in the market.
Redish: How far does the dissent approach get us? Isn’t there a circularity problem? Every time speech is regulated based on content, it’s dissenting.
Shiffrin: Two points – in crafting categories, look at the overall category. Dissent is the practice of criticizing customs, habits, authorities, etc. Commercial speech generally doesn’t do that. That there might be some instances in which it does criticize does not make it dissent. Perjury is not dissent; it doesn’t criticize the existing system.
Re Volokh’s point – children now think the point of life is to get rich, and they have hugely increased levels of anxiety about being able to get particular products. We have to make a choice – to choose neutrality is to choose to have our kids live this way. There is neutrality liberalism, which assumes rationality and assumes that truth emerges in the marketplace. (Holmes is not good on this because he’s a social Darwinist; he doesn’t even believe in truth.) The other version believes we have a commitment to moral beings and should structure society for them. When you decide not to regulate, you get $265 billion of spending to promote products, and the overall impact is different than trying to promote a single product – the overall impact is to convince people that being rich is important. People somehow think they’re not influenced by this and that advertisers are wasting billions of dollars.
Throughout, people have said that those who want to regulate commercial speech are foisting ideologies on others. The fact is that liberal neutrality -- a commitment to the idea that people act rationally when bombarded with imagistic advertising -- is also an ideology, and not a neutral one and not one backed by evidence.
Volokh: You’re hoping that the voters will agree with you and regulate imagistic advertising despite this bombardment. There are different views of the good life, and suppressing some speech to persuade people of the right meaning of life is viewpoint discrimination. And if you win, would speech advocating materialism become dissent?
Shiffrin: Under no circumstances would he say that non-commercial speech advocating materialism should be suppressed. He’s arguing for something rather modest. It would not be unconstitutional to move to a system of mass communications – TV – that didn’t involve advertising. The current system is run by advertising and has a significant cultural impact, and the government could take that into account.
Weinstein: Our theories don’t depend on fears that people will be persuaded by something (except, apparently, that they will be persuaded by Shiffrin’s pro-regulation argument). We aren’t worried about how people are persuaded. That’s a different level of values.
Shiffrin: What about advertising to children?
Weinstein: That might be constitutional. (Not clear what he means here; I think he means he’s willing to accept regulation.) But if you’re worried about adults being persuaded, you’re advocating viewpoint discrimination, whereas our theories are of course not value neutral but don’t require viewpoint discrimination. (There’s some manipulation of baselines going on in this argument.)
Also, is discriminatory speech about racial and sexual equality now dissent? Would you want to restructure society to make sure that such viewpoints don’t get lost in the new social consensus, as you want to restructure society for nonmaterialistic views?
Baker: As to individuals, you don’t tell them that they can’t speak or can’t associate. We’re choosing different structures in communication to favor and disfavor certain things, as we choose certain distributions of income and property rights. Unorthodox positions must be allowed, but he wants to reserve judgment on particular solutions.
Collins: Equating corporate and commercial speech is problematic from the outset. R.J. Reynolds the natural person/zillionaire making a statement about tobacco shouldn’t be different than R.J. Reynolds the corporation. The critique of corporate power assumes that corporations are big and tyrannical, but there’s also the idea that corporations and limited liability allow the little guy to come into the market and not be blown away. If corporate structure can enable moral behavior in the market, as Seana Shiffrin said, shouldn’t we respect that?
Congratulations to Loyola and the organizers for an excellent conference.
Also, we tend to talk about corporations as natural beings that just happen to have a particular structure, rather than as a product of law (which is what makes Seana Shiffrin’s perspective so helpful).
Eugene Volokh, UCLA School of Law: There are two ways of applying First Amendment theories – first, does this speech advance the interest we care about? For Shiffrin, does this advance the goal of preventing injustice? Shiffrin says some speech encourages materialism and distracts from justice, and thus should be valued less than other speech. But we might get our evaluation wrong. Volokh thinks that materialism and consumerism promote justice. The countries that have emphasized consumerism have done better than ones that haven’t. We could engage in status competition in other ways, like destructive political battles or hypernationalism or utopian ideologies; compared to that, liking tennis shoes is nicer. It fosters attitudes favoring consensual trade and material improvement for yourself and your family, and usually requires you to acquire skills and habits that make it more likely that other people will want to trade with you. Advertising may not promote justice directly, but it doesn’t hinder it. In fact, desire for equal access for material goods has driven many equal rights movements.
There are different visions of what promotes and prevents injustice. If your theory of First Amendment theories is that courts should evaluate individual types or even instances of speech for furthering the relevant values, you risk serious systematic errors. Don’t ask whether communist speech promotes democratic self-governance, but whether protecting a broad range of speech promotes our values more than giving judges discretion on a case-by-case basis. Sometimes the answer will be: judges should have discretion. But often it won’t be.
Second, Shiffrin said in response to Redish that you can’t just look at one argument against protection, but at the complex of arguments taken together. Volokh argues that, likewise, a lot of the information we get in private conversation, in bits and pieces, ends up being more important to our decisions than political stump speeches. Commercial advertising is another input, whether it’s “buy American” or simply “this is a good car,” which may affect our overall views about automobile regulation. Maybe it’s the aggregate of speech that’s relevant to Theory X rather than a particular ad.
Another question: do we define speech in (protected if within our categories) or out (presumptively protected absent exception)? How open should we be to moving speech in or out? There’s a tendency to overstate the extent to which lack of coverage is uncontroversial, for example on informed consent requirements. A court actually struck down an informed consent requirement on First Amendment grounds. We can’t just assume that professional/client speech is outside the First Amendment. Of course such speech is relevant to the formation of political and public opinion, as when our doctors talk to us about abortion.
The intentional infliction of emotional distress tort, for another example, has been substantially limited on First Amendment grounds, and the remainder is still controversial. Likewise the disclosure of private facts tort, and the public concern test, and other limits/exceptions that we’ve been treating as clear limits on speech.
C. Edwin Baker, University of Pennsylvania Law School: We ought to reflect on the utility and dangers of symbols and images. Shiffrin’s early work was appealing because it offered the dissenter as a symbol rather than the marketplace. Most of people’s examples of valuable speech – opera, State of the Union address – were types of speech that no one is proposing to regulate. So should we find some other core examples? Another notion: suppressing “one side” is wrong. If you can convince Americans that’s what’s going on, you’ve gone far on the way to First Amendment success as a practical matter, regardless of theory.
Another image: The personalization of the corporation as if it were just another speaker, so that General Motors and a car buyer are the same. Are we being tricked about the way the world is? If we imagine Nike as identical to a natural person, then we see “one side” suppressed in Nike, even though any natural person is free to speak out on Nike’s side, and many did.
Criticism of the marketplace of ideas: it doesn’t work. If we were all perfectly rational and had infinite time, maybe discourse would really lead to wisdom. But some groups have more power than others, and what society concludes is powerfully affected by the resources supporters are able to put into persuasion. Given that we don’t even have an idea of what it would be like for a marketplace of ideas to be fair, it’s inadequate as a constitutional metaphor. But we still depend on people making decisions after hearing claims, and that commitment is important to our society and our freedom. This is where social engineering, in Shiffrin’s terms, come in.
How should social engineers think? Look for failures. If hundreds of billions are spent on advertising, how much is spent on promoting “green” or nonmaterialistic values? Even if the latter aren’t the right ones, the question is whether they have a fair shot. How do we empower people to disrupt the status quo that dominates not because of the brilliance of its arguments but because of the resources backing it? The image of the dissenter can help guide us.
Piety: She’s sympathetic to the idea that materialism can be progressive – the creation of a market advertising overtly to gays and lesbians helps legitimize them as subjects. But what about a tobacco company’s idea that women’s liberation means smoking? Consumers often try to avoid ads; why should Philip Morris be able to dictate to me what liberation means any more than the government? At least I voted for government representatives.
Volokh: Why is it paternalistic to advertise to you? I’m saying my view is better than yours, but that’s the essence of persuasion. When the government keeps you from hearing certain views, that’s different.
Why isn’t it disrupting the status quo for Philip Morris to say “screw all this health stuff, smoking is fun”? The very fact that tobacco is restricted makes it a source of dissent. The broader point: to say the marketplace of ideas doesn’t work is hyperbole. Holmes doesn’t say truth will come from the market, but that the best test of truth is its ability to succeed in the marketplace.
Piety: Often true, but consider “green” claims – government institutions may be better positioned to evaluate truth than consumers in the market.
Redish: How far does the dissent approach get us? Isn’t there a circularity problem? Every time speech is regulated based on content, it’s dissenting.
Shiffrin: Two points – in crafting categories, look at the overall category. Dissent is the practice of criticizing customs, habits, authorities, etc. Commercial speech generally doesn’t do that. That there might be some instances in which it does criticize does not make it dissent. Perjury is not dissent; it doesn’t criticize the existing system.
Re Volokh’s point – children now think the point of life is to get rich, and they have hugely increased levels of anxiety about being able to get particular products. We have to make a choice – to choose neutrality is to choose to have our kids live this way. There is neutrality liberalism, which assumes rationality and assumes that truth emerges in the marketplace. (Holmes is not good on this because he’s a social Darwinist; he doesn’t even believe in truth.) The other version believes we have a commitment to moral beings and should structure society for them. When you decide not to regulate, you get $265 billion of spending to promote products, and the overall impact is different than trying to promote a single product – the overall impact is to convince people that being rich is important. People somehow think they’re not influenced by this and that advertisers are wasting billions of dollars.
Throughout, people have said that those who want to regulate commercial speech are foisting ideologies on others. The fact is that liberal neutrality -- a commitment to the idea that people act rationally when bombarded with imagistic advertising -- is also an ideology, and not a neutral one and not one backed by evidence.
Volokh: You’re hoping that the voters will agree with you and regulate imagistic advertising despite this bombardment. There are different views of the good life, and suppressing some speech to persuade people of the right meaning of life is viewpoint discrimination. And if you win, would speech advocating materialism become dissent?
Shiffrin: Under no circumstances would he say that non-commercial speech advocating materialism should be suppressed. He’s arguing for something rather modest. It would not be unconstitutional to move to a system of mass communications – TV – that didn’t involve advertising. The current system is run by advertising and has a significant cultural impact, and the government could take that into account.
Weinstein: Our theories don’t depend on fears that people will be persuaded by something (except, apparently, that they will be persuaded by Shiffrin’s pro-regulation argument). We aren’t worried about how people are persuaded. That’s a different level of values.
Shiffrin: What about advertising to children?
Weinstein: That might be constitutional. (Not clear what he means here; I think he means he’s willing to accept regulation.) But if you’re worried about adults being persuaded, you’re advocating viewpoint discrimination, whereas our theories are of course not value neutral but don’t require viewpoint discrimination. (There’s some manipulation of baselines going on in this argument.)
Also, is discriminatory speech about racial and sexual equality now dissent? Would you want to restructure society to make sure that such viewpoints don’t get lost in the new social consensus, as you want to restructure society for nonmaterialistic views?
Baker: As to individuals, you don’t tell them that they can’t speak or can’t associate. We’re choosing different structures in communication to favor and disfavor certain things, as we choose certain distributions of income and property rights. Unorthodox positions must be allowed, but he wants to reserve judgment on particular solutions.
Collins: Equating corporate and commercial speech is problematic from the outset. R.J. Reynolds the natural person/zillionaire making a statement about tobacco shouldn’t be different than R.J. Reynolds the corporation. The critique of corporate power assumes that corporations are big and tyrannical, but there’s also the idea that corporations and limited liability allow the little guy to come into the market and not be blown away. If corporate structure can enable moral behavior in the market, as Seana Shiffrin said, shouldn’t we respect that?
Congratulations to Loyola and the organizers for an excellent conference.
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