WIPIP, Panel 5

Irene Calboli, Marquette University Law School
The Case for a "Reasonable" Expansion of the Protection of Geographical Indications of Origin Under TRIPS
Abstract | Paper

Calboli defends some expansion of GIs, though does not endorse the European prohibition on “-like” or “-style” designations. Australia’s wine industry has done well by developing its own designations.

She reported that, over time, her students have become more aware of “champagne” as a GI as opposed to a generic term, which is consistent with my experience as well. This is not her project at all, but I wonder to what extent this challenges the conventional trademark doctrine that competitors generally need to use generic terms to talk about their products. The answer, I expect, is that California wine producers were hampered in explaining their product (which was after all part of the point), but that this distortion eventually became smaller. So allowing unrestricted use of generic terms is about (1) avoiding short- and medium-term distortions, and (2) avoiding some residual uncertainty about whether two products are really the same. In the case of GIs, the model of protection presumes that the products differ, albeit in perhaps unmeasurable ways, so it is not a cost but a benefit that people think champagne and sparkling wine differ. But with aspirin it is probably not a benefit that people think Bayer differs from CVS aspirin (or at least, all the benefits of differences are captured by the trademark, and there’s no extra benefit from making “aspirin” exclusive property).

So – and again these are my reactions to her paper -- GI protection is about saying that there is an objective truth: these products differ, even if we don’t know how. The protection exists regardless of consumer perception. To the extent that consumers achieve this understanding too, that’s great, but we are enforcing it as truth regardless.

Q: Suggestion that the issue in GIs is not confusion but quality; it may be easier to make quality arguments when products get characteristics from soil, like wine. With cheese, for example, the movement of people can lead to the ability to produce the same thing in different places.

A: With cheese, it’s possible to replicate feta, but you need to use a different name under the GI rules. Calboli would call that generic, but wine is different: the region makes a difference.

Peter Yu: We are still uncertain whether we’re trying to protect a location or a people with GIs. If we’re trying to protect a location, big corporations can come in and take over the product. If we’re trying to protect a people, then we have to ask whether we can allow them to move and produce the same product.

Calboli: Protection shouldn’t be tied to producer size. Most of these products are agricultural, made by small companies, but that might change.

Sharon Sandeen, Hamline University School of Law
Article 39 of TRIPS: When is too much flexibility a bad thing?
Abstract

TRIPs and the Uniform Trade Secrets Act differ in definitions of trade secrets. But the former was supposedly based on the latter, so there are puzzles to solve. Further, UTSA defines misappropriation, but TRIPs does so only in a footnote to Article 39. Pharma cos are trying to use Art. 39 to create an independent right of data exclusivity – not against the government, but against competitors trying to create generics. She is disturbed by this. Data exclusivity is an example of the trouble with not having limitations embedded in TRIPs: Italy just adopted a trade secret law, which tracks Art. 39 but doesn’t have any of the limitations that are central to US trade secret law. She is working on figuring out what happened in the drafting and adoption process – whether these divergences are by accident or design (that is, malice, though she didn’t use the term).

WIPIP, Panel 4

Deborah Gerhart, University of North Carolina School of Law
Consumer Investment in Trademarks: Why it Deserves More in Fair Use Returns
Abstract | Paper

She’s beginning a project on the following idea: The corporate owner of the mark is not the sole master of its meaning; it’s important that consumers get some control reflecting their investment in TM meaning. The discourse surrounding consumers in TM cases is patronizing; based on a model of consumers as superabsorbent couch potatoes. One issue: use of terms in dictionaries; dictionaries respond to TM lawyers’ threats even though there’s no cause of action – consumer interests might affect this hypervigilance by TM owners. There is a duty to police, but we should carve out exceptions honoring this consumer investment. (There’s a similar proposal by Deven Desai & Sandra Rierson, relating specifically to genericity.)

We could, for example, recognize a type of cultural dilution as nonactionable, for example the appropriation of “spam” for email. It’s not blurring because it doesn’t interfere with source identification, just creates a second parallel narrative. Another possibility: Consumers deserve to be able to use marks to search for information about those marks – informational fair use.

Eric Goldman: Likes the idea of investment, and suggests exploring more how consumers use marks to manage their lives – reducing search costs in ways that we don’t usually think about. Also asks about what happens when TM owners change their products – are they harming consumers who have invested in the brand, e.g., New Coke? And wonders about the problem of heterogeneity of meaning. Brands mean different things to different people; whose meanings should we honor?

A: This last is why the problem of consumer investment is so important. We can’t just look at the TM owner.

Goldman: So how would that play out in an infringement case? How do we account for the brand stories of people who aren’t present in the courtroom?

A: We should look at evidence of use, e.g. on the internet. We look for viral meaning, not meaning created by competitors.

Lisa Ramsey: “Spam” is a sort of dilution by blurring. Also, consider descriptive terms – consumers have a right to know about the descriptive qualities of products or services regardless of secondary meaning. The descriptive fair use defense may be too limited for consumer needs.

A: Spam may have been blurred, but it’s not something that should be actionable nor does she think it was intended to. 9/11 means something different to us now, but the Porsche 911 still has a meaningful narrative. It doesn’t harm in the same way as use by a competitor.

My comment: Gerhart made several references to the special harm done by “competitors.” This seems to be calling back to an older idea of TM infringement. Once it was abandoned and noncompetitor use became actionable, TM just kept expanding, causing us to look around for limiting principles. Those principles having failed, we return to competition; likewise, people like Mark McKenna are starting to suggest a materiality requirement for infringement. The interesting thing to me is that competition and materiality are parts of the false advertising test under the Lanham Act; and furthermore, they’ve been implied by courts. So there is a model for doing something like this already in the caselaw.

Q: Consumers can contribute to the value of a product – network effects with a computer program, for example – but may not be contributing to the value of the mark – Lotus 123. There are all sorts of investments.

A: Agrees. But surprisingly, many uses of marks are expressive – people mostly buy hybrid cars to express something about themselves, despite the price of gas.

Tom Bell: Your examples involve consumers having settled on a meaning. But when people are contending to develop meaning, we could get chaos.

Peter Jaszi: (Responding to Gerhart’s earlier invocation of “Napsterphobia,” where TM owners irrationally fear loss of control/rights.) What evidence can we use to define and address the problem?

A: She’s seen it in her own licensing work – people want to lock up their content so tight it’s useless.

William McGeveran, University of Minnesota Law School
Rethinking Trademark Fair Use
Abstract | Paper

Contours of the project: Anytime someone uses a mark to facilitate saying something, we need to at least inquire about whether that’s legitimate and not within the scope of infringement/dilution, though some will perhaps ultimately be correctly suppressed. That puts descriptive and nominative fair use together.

There are few really bad decisions when they get all the way to final judgment, but there’s a persistent chill on these types of uses despite the paucity of bad law. McGeveran argues that part of the problem is a failure to conceptualize the relevant defenses – the circuits disagree, the treatises disagree, and even copyright fair use looks better. Moreover, almost all the versions end up collapsing into likelihood of confusion inquiries – for example, this is true with “trademark use” requirements, as well as with nominative fair use. It ends up being more difficult to show nominative fair use than to show lack of confusion. And, as the previous sentence suggests, the burdens of proof get misplaced – if nominative fair use is a substitute for the confusion test, the defendant has to show it’s done nothing else to cause confusion. Relatedly, because these tests are fact-intensive and conflated with confusion, they’re not prone to resolution early on in a case, even summary judgment.

So we need to restructure the law to allow early deployment and resolution, detached from fact-intensive considerations. Hard cases will still need further factual development, but that could decrease the chill.

Sharon Sandeen: What about a Markman hearing type procedure? In her experience, it did help settle cases.

A: That’s the kind of thing he’s thinking. There’s no need to change the FRCP, just doctrine and possibly judicial management practices. The substantive problem with our current defenses is that they depend so much on the facts.

My Q: How do you cash this out?

A: Use news reporting, use in political campaigns, etc. as explicit carveouts, as with dilution law. It may leave us with keywords as an issue that has to be thought out, but at least we can get rid of suits against artists and Ralph Nader.

Farley: You have to answer a question that puzzled the Court in KP Permanent: What does “fair” mean? How can it be fair if there’s confusion?

(I think the answer can be Scalia’s in Wal-mart: given the costs of sorting out the few confusing uses from the many nonconfusing ones in a defined subset of cases, the game isn’t worth the candle. This of course makes you rely on generalizations like “most uses in headlines aren’t confusing,” but if it’s good enough for Scalia, why isn’t it good enough for us?)

A: This is a problem that shows up in the 9^th Circuit’s rule on remand in KP Permanent, where the court denies summary judgment – the remand makes the problem even worse by complicating the test for descriptive fair use. We must consider how our beautiful tests work structurally and procedurally, or they’ll suppress good uses.

Ramsey: consider anti-SLAPP procedures as a model. And consider saying “we just don’t care about certain types of sponsorship confusion,” maybe on constitutional grounds.

A: That could be good!

Mike Carroll: rather than needing a coherent theory of fair use, we need a more robust theory of TM’s limiting principles outside of confusion. Then we can figure out how to clean up our standards and implement our normative limiting values. Lists of specific safe harbors have pernicious unintended consequences, as we’ve learned in copyright – floors become ceilings; courts draw negative inferences. At a minimum, safe harbors should be defined functionally. And we should also loosen the standards for declaratory judgment so people can get answers quickly.

Mark McKenna, Saint Louis University School of Law
Trademark Use and the Problem of Source in Trademark Law
Abstract | Paper

The search cost theory of TM law is not sufficiently rich to give us those limiting principles Carroll talked about. Our failure to find limiting principles once the competition requirement was abandoned has led to the development of the new contender, trademark use – defined roughly to mean a use that indicates source. (You could require affixation as in the statute, but that wreaks havoc on a lot of doctrine.)

He’s emotionally on the side of Lemley & Dogan, but ultimately trademark use reduces to confusion – do consumers understand something as an indication of source? – so it doesn’t get us out of the problem.

So far the only things that make irrelevant the basic question of source identification are from outside TM: Dastar and Traffix considerations of interference with copyright and patent regimes. This is a much bigger problem than TM use: everything in modern TM law is tied to a concept of consumer understanding of “source,” and the judicial interpretations and practical meanings of source have kept expanding. Even the start time of a baseball game – 7:11 – can indicate sponsorship, so consumers can rationally conclude that anything can. The only logical endpoint is complete control over a mark. But that’s so obviously bad that we need principles to deal with it.

And this is search cost theory’s biggest weakness: once we decide consumer confusion is the harm we care about, as opposed to an indicator of some other harm, it’s hard to identify what the stopping point is and it’s very easy to characterize plaintiff’s claims in consumer protection terms. So let’s detach some defenses from confusion, increase the quantum of confusion necessary to support a claim, add a materiality requirement, and maybe other things.

Farley: We really need to bring “source” back within some reasonable bounds. McKenna says TMs are functioning in the world more broadly than they used to, so of course the law needs to follow, but she’s not convinced.

A: He thinks we can’t go all the way back to trade diversion, but he wouldn’t say we have to follow “source” as far as the market does in practice. We could define source differently for infringement purposes. It might actually matter to some consumer decisions if there is an affiliation between the plaintiff and defendant, and we should be willing to recognize it but perhaps presume irrelevance in certain circumstances. If people start to believe start times signify source, though, then maybe a team shouldn’t be allowed to pick a 7:11 start time to advertise itself.

My Q: Nominative fair use, trademark use, and inherent distinctiveness can be seen as a bunch of presumptions, some rebuttable and some not. If we raise the evidentiary standards and don’t allow owner-favorable presumptions (such as occurred in Boston Hockey), and we regulate surveys carefully, we might find there’s very little evidence of interference with trademark rights in many of these cases. Consumer perceptions, in other words, might not be as trademark-driven as we think.

A: He agrees, but it doesn’t solve the problem of kicking cases out early.

Calboli: Maybe you’re going back to technical TMs v. unfair competition.

A: If he had confidence in our ability to limit the concept of unfair competition (requiring, say, competition) he might endorse that. But he’s not sure that TM can be distinguished from unfair competition in that way. We need to define the harm agains which we’re protecting people.

WIPIP Panel 3

Jasmine Abdel-Khalik, University of Missouri-Kansas City School of Law
Is a Rose by Any Other Image Still a Rose? Disconnecting Dilution’s Similarity Test from Traditional Trademark Concepts
Abstract | Paper

Dilution is about the mark itself, unconnected to any goods; it’s about interfering with the story of the mark, rather than interfering with source identification. So how do you tell how similar a mark has to be before it dilutes? Schecter wanted protected marks to be coined, arbitrary, or fanciful, and they’d be protected against identical uses. The change in modern law, allowing acquired distinctiveness to suffice for dilution protection, is important because the mark owner is now adding its own story to an existing term, which means it fights against preconceived ideas – it’s prediluted. So we need to focus on the number of 3^rd-party marks out there, not just whether the claimant has acquired distinctiveness. That is purportedly captured by the fame requirement – it means your story has to have won out.

Substantial similarity is the killer question. In the 9^th Circuit TREK and ORBITREK are apparently similar enough for dilution; query whether that would have been similar enough for Schecter. Another case: DOGIVA and CATIVA; the court skipped past similarity, especially for the latter. Many other –IVA marks exist; there must be something more that triggers substantial similarity. Moseley said mental association wasn’t enough to demonstrate similarity, but didn’t say what would be enough. What about sight, sound, and meaning, the standard infringement trilogy? But with likelihood of confusion, you always look at the mark in context, which influences judgments of similarity. She would like to talk about uniqueness, which to her resembles copyright more than trademark – it’s about originality.

Goldman: Invoking substantial similarity from copyright creates a bunch of problems; it’s so unpredictable. Perhaps there’s some more precise test (as copyright has in special subfields).

Q: Arbitrariness alone is super-distinctive, but doesn’t deserve dilution protection without fame. If you push for uniqueness, don’t you lose MCDONALD’S and protect all those unknowns?

A: She’d offer thinner protection to MCDONALD’S than to a unique mark.

Q: The more famous the mark, the less you can dilute it.

A: That ties in to the concept that it’s the death by a thousand cuts, not the first cut, that matters.

McKenna: There’s a bunch of cognitive psych literature that says some marks are just unassailable. That leaves open what happens to the others. But it’s hard for TM owners to make a straight-faced claim about this – they have to say “we’re really famous, but not that famous.” I think very badly of TM law, but I think worse of copyright. Substantial similarity is just a crapshoot. But you could at least evaluate similarity on basic principles; copyright similarity is about market substitution, but that doesn’t make sense here, and that’s a function of the fact that we don’t know what the harm of dilution is.

Irene Calboli: Why do you think the test should be different from the infringement test? Similarity should be required in both cases. What about the old technical/nontechnical trademarks division?

(My thought: with confusion, less similarity can trade off with mark strength and relatedness of goods – CATIVA for candy is a different thing than CATIVA for cellphones. I don’t think we want that for dilution.)

Lunney: Schecter was writing about technical trademarks, since they were the only ones that could be “TMs.” Why do you want a similarity screen before going to the blurring test?

A: Because we’re going to make mistakes on blurring.

Q: So why not just fix the blurring doctrine?

A: Similarity as a screen allows better evaluation of risks by potential market entrants than a multifactor test.

Sean Pager: What about the filtration procedure from copyright; could it be applied to the trademark in evaluating its position relative to other marks (applying semiotic theory)?

My comment: The funny thing to me is that when marketers talk about unique brand stories, they often speak in one-word terms – this brand is about YOUTH, or POWER, or whatever. And those are the farthest thing from unique, even though the brands themselves are distinctive and powerful. So seeing dilution as about preserving brand stories makes dilution even more puzzling to me.

Katja Weckström, University of Turku
Trademark Dilution, Trade Mark Use and Trademark Law Theory- In Search of A Logical Connection
Abstract | Paper

Dilution is a right to control meaning: what are the appropriate limits on that right? The US and European conclusions are very different. The ECJ has said that TM use can’t be a categorical limit on the TM owner’s right to prevent infringement or dilution (and indeed the line between infringement and dilution is less clear there). Weckström likes the European system of flexibility in factors, which invites the ECJ to look at general legal principles without finding facts, because she finds it less burdensome to defendants – though it might not work the same way here.

Lunney: Do search engines behave differently in Europe?

A: There are the same problems, but on a national level, and hasn’t reached the ECJ yet. It’s not part of harmonization. The ECJ has no interest in making exceptions or special rules (e.g., how search engines should be treated). She would guess the UK is close to the US, but other countries will have strong protectionist caselaw that will usually find in favor of the TM owner.

Christine Haight Farley, American University Washington College of Law
The Feminine Mystique of the Brand in Trademark Today
Abstract

Her argument isn’t that dilution proponents make explicit, conscious use of metaphor, but rather that they evoke a submerged association between the brand and the vulnerable feminine subject in need of protection. It gives us a moral justification for dilution, which sorely needs one. It draws on past ideas about purity, like the old torts that protected male property interests in their female relations. It makes an affirmative claim that the harm is unmeasurable in market terms and that’s why we need to give legal redress – performing conceptual ju-jitsu on the “you can’t identify the harm” objection. That’s ironic given the strength of today’s brands.

The traction dilution gained in the 1970s and 80s tracks what was happening in the world of marketing, which was the rise of brand extension. Brands were exploiting themselves, creating their own vulnerability. Also, brands were no longer associated with a set of goods, but a set of ideas. And that’s always more tenuous – holding on to a “luxury” reputation is harder than holding on to a “bracelet” reputation.

Matthew Sag: How do Europeans talk about the same phenomenon? Brand extension goes beyond the US; we can learn about cultural meaning from the comparison. Maybe this is a function of the American prudish obsession with sex.

McKenna: Wants to challenge the historical narrative – state dilution is much older than federal protection, and state cases say the same thing decades back, though sometimes they say they’re deciding based on confusion.

A: Farley identifies an evolutionary development over time.

McKenna: See also the rise of the right of publicity, which does the same thing for people. Really this is about tarnishment – does blurring fit this story or not? Also, the John Deere case is a great example for you, “feminizing” a masculine brand.

A: Tarnishment is conceptually hard to separate from blurring, especially when the plaintiff is trying to sell one kind of sex (teasing) and defendant is using it more explicitly (porn) (e.g, the Victoria’s Secret case, the Dallas Cowboys Cheerleaders case).

Calboli: Does the older rhetoric of TM as property fit in here? During the same period, women’s reputations were protected as property, so the analogy is strong. Also, international development of protection may offer some lessons, especially in countries like Benelux that protected against any “association” or unfair advantage. (Unfair advantage has real resonance with the gender metaphor here.)

Me: The consumer also loses in this model of dilution, her attitudes changed to her detriment – kind of a “think of the children” thing. I now wonder about a slightly different metaphor, that of vulnerable child, who is unable to reason and subject to predation. Middle-class anxiety over managing children’s every experience is even greater than anxiety about women – and of course it’s young women’s sexuality that we worry most about. Though I’m not sure whether it’s the consumer or the brand who’s the child here; we could do a model of the TM owner as benevolent patriarch, TM as mother, consumers as children being guided in the proper way to think – and why should outsiders get to interfere with the parent-child relationship?

WIPIP, Panel 2

Frank Pasquale, Seton Hall Law School
From Net Neutrality to Search Neutrality: Frontiers of Equitable Information Policy
Abstract

Principles of net neutrality: transparency – we want to know if traffic is being slowed down, or if carriers are turning down controversial text messages. Open infrastructure – non strangulation principle that providers shouldn’t deliberately degrade quality of service in order to upsell the better quality, as makers of printers for home use do.

Many skeptics of net neutrality see it as an unnecessary burden. There’s been a “laissez-faire switcheroo”: Google is closer to a monopoly than broadband providers. The reductio ad absurdum is – what’s next, search neutrality? Net neutrality advocates call this a red herring, but Pasquale is interested in it. Pervasive vertical integration is a problem no matter the layer. Verizon cutting a deal with Yahoo! search is a problem, and so is Google cutting a special deal to put a company at the top of organic results all the time. The FTC has warned search engines to separate paid and organic content, but without transparency we just won’t know if that’s happening.

Google will put a notice next to your site if it appears to contain malware. If that gets you to clean your site up, great; but maybe there needs to be some sort of due process. (Later he talks about individuals’ ability to respond to their FICO scores, see election software, etc.)

Transparency: net neutrality advocates want to know whether packets are being blocked, quality of service is degraded, etc. Compare to the NYT/MoveOn controversy – we should know who gets discounts. There are parallel demands in the search engine context. Which groups and governments’ demands are acceded to? E.g., the results for a search of “Jew” on Google produce a link from Google explaining matters.

Laissez-faire claims against net neutrality: property fundamentalism (we own our platform); free speech absolutism (Red Lion is dead); Schumpeterian optimism (Google will build its own internet). And Google makes the exact same claims when people argue for intervention into its search results! Pasquale disagrees with them all. Google isn’t willing to wait for salvation through the market in the carrier context. Net neutrality can help competition.

Tom Bell: References work on the history of mandatory interconnection. Before then, people had two phones on their desks – there was competition, and then after mandatory interconnection Bell wiped everyone else out. So Google’s take on net neutrality might help it consolidate its power.

Pasquale: If you have net neutrality, you have to look at regulating Google too.

Eric Goldman: Google’s trying to have it both ways and should be held accountable. You are trying to develop a law of intermediation – the same arguments can be made against any intermediary.

Christopher Yoo: Failure to interconnect drives competition to connect everyone; someone then wins the race, and that creates a new set of policy problems. Everyone says Bell refused interconnection, but new entrants were no more interested in interconnection. Also, this isn’t Schumpeterian competition, which is vertical competition for the market – a succession of monopolies. Here, there is a drive to add a third player to a duopoly. Different monopolies at different levels can push into each other’s levels – one possible story is that those bumping up against each other are a good idea.

Pasquale: That’s a benefit of having countervailing monopolies at different levels. Maybe that’s the only hope we have – set some corporations against others.

Mark Schultz, Southern Illinois University School of LawThe Music Never Stopped: Technological Progress, Economic Growth, and Copyright
Abstract Paper

An interesting argument: performing arts are subject to the “cost disease” – productivity increases in the overall economy don’t increase productivity in this sector. A 45-minute sonata still takes 45 minutes and the same number of performers in 2007 as in 1907. As a result, performances become more and more economically unsustainable. There have been a number of responses to this argument, including claims that people spend more on art as society gets wealthier. But tour prices continue to go up, and only a few bands can make money from live performances. Copyright is a potential savior by allowing performers to capture some productivity gains from technology in the form of recorded/broadcast media and broader distribution. Basically, neither impeding technological progress nor abandoning copyright is a good idea for artists.

Tom Bell: Do we care about artists except insofar as their works are accessible to consumers? Performing costs are a red herring – we can get music from recordings, so who cares if live performance is more expensive?

A: This is a common response to the cost disease argument. You still need an incentive to produce recordings. Will we get anything if live performance gets more costly & records are no longer worth distributing?

Bell: Garageband shows that plenty of people will publish for free!

Michael Carroll: You’ve set up an all or nothing proposition: get rid of copyright or keep it. Also, the superstar effect creates a lottery effect – people will take the risk because they want to be one of the ten winning bands that makes money on tours.

A: It’s not all or nothing, though people do argue for abandonment of copyright. There is a class of performers who can’t provide music for free and can’t make a living just by touring, but could use copyright-protected business models.

My question, like Mike’s: allocatively, the rewards copyright offers suggest a shift more towards winner-take-all, since one violinist can satisfy more demand. How does that interact with the paper’s analysis? Depending on how people react to tournaments, that could induce more people to pursue artistic careers, or fewer – and either might be good for society, depending on the alternatives!

A: The long tail moderates that – technology allows people to connect with a smaller group of fans.

Q: So is the winner-take-all system more powerful in recorded media or in live performances? Which market is more skewed, and what effects does that have on incentives? We need to know more about the interaction of incentives; the long tail, after all, is profitable for retailers, but it’s not clear that it provides musicians with a living.

Glynn Lunney, Tulane University Law School
Copyright’s Price Discrimination Panacea
Abstract Paper

The paper was an example of work I like but do not remotely do. Lunney models the effects of increased price discrimination in a world where resources invested in creativity have to trade off with other investments, arguing that the most likely alternative is diversion from other creative fields in which price discrimination (or even copyright protection in the first place) is relatively less important. As a result, he shows, increased price discrimination is likely to decrease overall social welfare. I found the model comprehensible even though graphs give me hives.

Terry Fisher, in another paper, says price discrimination is socially cheapest way to achieve any given incentive level compared to uniform pricing. You can decide on the incentive level and then allow price discrimination and give less overall copyright protection in length and scope. But there are two problems: (1) the difficulty of setting the right incentive level, and (2) political economy: you never get the quid for the quo; scope keeps getting bigger.

There may be cases in which price discrimination is a good idea – addressing the costs of uniformity in copyright scope, or achieving a better incentive level – but the assumptions really matter; we need to articulate and defend the reasons why we think price discrimination works.

Q: Aren’t you assuming a lot about the industries copyright would steal from?

A: Look at other creative industries – they don’t have anywhere near the ability to price discriminate as copyright industries.

Q: Price discrimination is not the only way to appropriate extra value.

A: I don’t see copyright industries capturing a smaller fraction of value than the industries nearer to them. But this is the right debate: what are the most plausible assumptions to make about the markets?

There are always more market failures to talk about, which is why second-best analysis is so hard to do – intractable, even.

A paper from another panel:
Eric Claeys, George Mason University School of Law
INS v. AP: Hot News and Natural Property Rights
Abstract Paper

I liked the discussion at the end of the paper of the limits of economic analysis in the presence of substantial empirical uncertainty, and the ways in which economics in fact reduces to intuitions. Exactly what Lunney was talking about!

IP Works in Progress, herein of the First Amendment

Works in Progress Intellectual Property Colloquium, panel 1

Lisa Ramsey, University of San Diego School of Law
Increasing First Amendment Scrutiny of Trademark Law
Abstract | Paper

Ramsey began with an interesting example of First Amendment concerns with TM: a company with a TM in LIFE IS GOOD that makes branded apparel has gone after parodists and competitors, including LIFE IS GAY and LIFE SUCKS. This is worrisome. She offers a framework for approaching 1A problems in TM.

Questions addressed: (1) Is this use of a TM actually speech? (2) Is this speech regulation state action? As to TM, she considers this an easy question: yes, the state is involved. (3) Is this a type of speech categorically excluded from 1A protection/entitled to lesser protection? (4) Is this content-based or content-neutral regulation? Also we need to consider vagueness, overbreadth, and prior restraints.

Benefits of this approach: it focuses us on the government’s regulatory purpose and requires carefully shaped laws. The 1A approach makes us decide whether confusion as to sponsorship should matter, and may offer a way out of the circularity of permissions leading to ever-more-expansive TM rights noted by many. It also has implications for dilution, initial interest confusion, cybersquatting, and other areas.

Ramsey considers TM to be a content-based, sometimes word-based or speaker-based, regulation, requiring a compelling interest and least restrictive means analysis. But this is different from regulation that stems from disagreeing with a word, like indecency regulation; the government isn’t really trying to control the communicative impact of the word used by any speaker in any context. So much TM law would survive.

Eric Goldman makes the interesting suggestion that she should apply her thesis to “para-trademark” laws like Utah’s online registry law. 1A challenges might work well there even if courts resist them in traditional TM law.

Rebecca Tushnet

It Depends on What the Meaning of “False” Is: Falsity and Misleadingness in Commercial Speech Doctrine
Abstract | Paper

My notes: The Lanham Act is about who is to be master of meaning in commercial advertising.

Even at the level of individual words – trademarks or other advertising claims – sorting true from false is extremely difficult. This is why I am deeply skeptical of proposals to equate commercial and political speech when they’re accompanied by promises that we’ll remain protected against consumer fraud.

True and false aren’t easy lines to draw. So just saying “false and misleading speech can be banned, which makes trademark law constitutionally acceptable” rushes over much of the real conflict between the Lanham Act and the First Amendment, which is who gets to decide what’s false and what’s misleading.

A fundamental thread running through much modern trademark scholarship and case law is that if a defendant’s use of a mark is truthful, it can’t cause confusion. The problem is that it’s not right. True statements can cause confusion, because of the multiple ways in which people interpret messages and because of the irreducible, even tragic, gap between speaker and listener.

False advertising law – also part of the Lanham Act – knows this, but we have adhered to this extremely useful fiction in trademark law because acknowledging that truth can be confusing would either destabilize much trademark law or expand trademark rights beyond acceptable boundaries.

Example: Ask doctors which of two products they prefer; 30% choose A, 10% choose B; 60% say there’s no difference. Is it false to say A is preferred by doctors 3-to-1? The Seventh Circuit said no, because it was true, even though the survey showed that it misled consumers about doctors’ overall preferences.

The obvious countermove is to say that if a statement is confusing, it can’t be true. But that hitches speaker’s truth to listener’s understanding, leaving us nothing independent against which to evaluate the listener’s understanding. It’s unlikely that we want to do that – or even that we can, as a matter of constitutional law.

To take an example from Mark McKenna, suppose the NYT runs a story truthfully saying “Nike Announces New Shoe Line,” and because Nike is so good at marketing consumers assume that Nike authorized that headline. The confusion is over what consumers perceive to be an implicit representation added to the explicit headline: Nike approved this story. The headline itself is true – standing alone -- and it is confusing – when the implicit message attached to it is added in.

The if-true-not-confusing position ignores implicit meaning. That’s fine here, since no one wants the NYT even potentially exposed to liability for such a headline – but it is an undertheorized thing, and it’s bound up with the problem of trademark use that is so consuming trademark scholarship these days.

Ignoring implicit meaning may also be an impossible thing as a practical matter, since speech depends so much on implicature for its success. In fact the presence of a claim in an ad is an implicit representation that it is or should be material to choice, and we routinely understand it that way – my favorite example comes from an ad for coffee that said “made with smaller grounds” – people liked it better, even though they were given no reason why smaller grounds were better and in fact there’s no objective evidence that they are.

But there are a lot of scarier things that can be said through implication – e.g., the recent informed consent case decided by New Jersey Supreme Court. And this is worth emphasizing: Regulating truth and falsity necessarily means shaping preferences. There is no way to limit regulation to “just the facts” because it’s the implications of the facts that aid or deceive consumers.

Another example, recombinant bovine growth hormone: What if a dairy advertises its milk as rBGH free? There’s no evidence of health or safety differences in the milk for humans. But there are concerns for the cows, the survival of family farming, and the general wisdom of genetic engineering.

The FDA has suggested that labeling foods as non-GMO has the potential to deceive consumers about health. If more consumers care about direct health and safety consequences than about other possible consequences of GMO food – which seems likely – and if consumers see labeling as a signal about health or safety, then the GMO label will help a small percentage of consumers, but only by deceiving a larger percentage. And that’s assuming that there are no preference-shaping effects, which complicate matters further.

Final point: trademark lawyers think TM is insulated from the First Amendment, as copyright lawyers once did, as defamation lawyers once did. But the Fifth Circuit last year decided a case about the statutory regulation of “Cajun”: the First Amendment precluded the legislature from banning the use of the term on non-Louisiana foods because there was no evidence it was inherently deceptive in a way that couldn’t be corrected by disclosure or consumer sophistication.

Especially as we consider expanding GI protection, it would be a serious mistake to think that our little corner of the law will continue to get a free pass when the Supreme Court has been increasing its scrutiny of other commercial speech regulations consistently over the past decade. Imagine the commercial speech standard – suppression allowed only when the speech is inherently deceptive – applied to private party trademark suits. That would be a big enough change, and it would only involve applying general commercial speech doctrine as it’s evolved under Central Hudson. Full constitutional protection for commercial speech would mark an even bigger change.

Many insightful comments, including a defense of laissez-faire (which I don’t think can be coherent because once you allow common-law protection against fraud into your laissez-faire state we are merely debating what counts as fraud – consumer protection is at least in one popular form about promoting autonomy).

Eric Goldman suggested important differences between preference-shaping by private actors and government. My reaction: Such differences might well justify certain procedural requirements on regulation, but – because consumers vary in the use they make of information -- government cannot get out of the business of preference-shaping; both banning the “non-GMO” label and requiring the “GMO” label are preference-shaping, and government might legitimately do either, depending on the evidence, because both could be justified as anti-fraud measures as to some significant number of consumers.

Goldman also pointed out the costs of labeling and mandates, since meaning evolves over time. The paper takes this up – I agree, but there are also costs of uncertainty and of confusion during the transition time; certain market participants might find it valuable to redefine “dolphin-free tuna” as tuna with no dolphin parts in the cans, but that would be costly to non-dolphin-killing tuna producers and consumers who want to buy their products. Finally, Goldman suggested that the internet is a good way to punish misbehaving sellers – consumers can communicate with each other. This is true, but information overload limits our ability to use all the information out there – and especially if the government cut back to common-law fraud, it would be even harder for us to figure out what we need to figure out.

David Olson, Boston College Law School
Towards a First Amendment Grounding for Copyright Misuse
Abstract | Paper

The paper grows out of Carol Schloss v. Estate of James Joyce: what can be done to make the world freer for this sort of scholarship? Fair use is too risky: indeterminate, expensive, leads courts to split the baby – though Schloss got attorneys’ fees, it’s too rare to rely on. Copyright misuse could be the proper sword against overreaching by copyright owners. But in order to induce courts to find misuse, which they won’t if the consequences for the copyright owner are too severe, he wouldn’t completely invalidate the copyright of an overreaching copyright owner – he’s considering various remedies, such as compulsory licensing until the misuse is cured, free licensing to the injured party, etc.

Born freecycle

Freecycle Network, Inc. v. Oey, --- F.3d ----, 2007 WL 2781902 (9th Cir.)

Oey was preliminarily enjoined “from making any comments that could be construed as to disparage upon [The Freecycle Network]’s possible trademark and logo” and ordered to “remove all postings from the [I]nternet and any other public forums that he has previously made that disparage [The Freecycle Network]’s possible trademark and logo.” The Ninth Circuit vacated this injunction.

Plaintiff TFN is an Arizona nonprofit “dedicated to encouraging and coordinating the reusing, recycling, and gifting of goods.” It coordinates over 3,700 Freecycle groups worldwide. (Disclosure: I was a member of the Arlington group for a while and admire the organization.) People use Freecycle to offer items they no longer want, avoiding or at least delaying the trip to the landfill.

TFN claimed to have consistently used the marks FREECYCLE and THE FREECYCLE NETWORK and “The Freecycle Network” logo since May 2003 to refer to itself. But it also admitted that it initially used the term “freecycle,” freecycling, freecycler, etc. to refer more generally to the act of recycling goods for free via the Internet. In 2004, based on Oey’s advice – he was then a member – TFN decided to police its use of the term and to pursue trademark registration for it. Shortly after filing its registration application, TFN implemented a strict usage policy, drafted by Oey. In early 2006, the mark was published for opposition, and an opposition was filed; the mark remains unregistered, and the opposition was stayed pending the outcome of a Northern District of California challenge (by a group founded by Oey) seeking a declaration that “freecycle” is generic.

Obviously, Oey experienced a change of heart about TFN and the putative Freecycle mark. By mid-2005, Oey was making statements in email and on the internet that “freecycle” was generic and incapable of trademark status, encouraging others to use the term in its generic sense and to oppose TFN’s pending registration. He did not oppose trademark status for the full name “The Freecycle Network.” He argued that established genericism would help TFN in its marketing mission, spreading the “freecycle” concept.

In spring 2006, TFN sued Oey for contributory trademark infringement and trademark disparagement under the Lanham Act, injurious falsehood, defamation, and intentional interference with a business relationship under Arizona law. The district court granted a preliminary injunction based on the Lanham Act claims, and the Ninth Circuit stayed the injunction pending appeal.

The district court characterized the trademark issue as one of infringement. But it didn’t analyze (or even mention) the factors in the likelihood of confusion test. Instead, the district court found (1) TFN has a mark, (2) Oey at one time believed (1) and sought to protect the mark, and (3) he later publicly encouraged the disparagement of the mark. Even if all three things are true, they don’t demonstrate likely success on the merits. (The court of appeals also noted that the actions Oey encouraged others to take aren’t actionable under the Lanham Act either, making success on a contributory infringement claim unlikely. Nothing in the record suggests intentional inducement of infringement, or that third parties actually used the mark to infringe. Encouraging the use of a claimed mark in its generic sense is not actionable.)

Specifically, the court held that Oey’s actions were likely not “use in commerce” – here not used as a jurisdictional term about Congress’s power under the Commerce Clause, but deployed as a limiting construction precluding Lanham Act coverage when the defendant didn’t use the mark “to promote any competing service or reap any commercial benefit whatsoever.” Oey just expressed his opinion about TFN’s trademark rights and encouraged like-minded individuals to do the same.

Even if Oey’s statements were “use in commerce,” they were not likely to cause confusion about the connection between Oey’s services (or any others’ services) with TFN. His statements neither mentioned any competing service or product, nor claimed affiliation with TFN. (If other groups, relying on Oey’s analysis, called themselves “freecycle networks,” presumably that could cause confusion, but it does seem mistaken to hold Oey responsible for that possibility.)

Finally, his statements couldn’t be false advertising, because they weren’t made in “commercial advertising or promotion.” And then the court made a holding that may come up in more standard Lanham Act cases: Oey’s statements didn’t concern “the nature, characteristics, qualities, or geographic origin” of “another person's goods, services, or commercial activities.” Statements about the mark, the court held, are not statements about the services.

Though the case law is divided, some courts have suggested that statements about a competitor’s trademark rights (or lack thereof) could be false advertising. Suppose a true competitor said “Our competition claims to have a trademark on Product X, but they don’t.” It may well be that no reasonable consumer would take this as a statement about the competition’s honesty or competence – though I’m not so sure – but the interpretation in this case cuts off potential liability under the Lanham Act as a definitional matter. The court, however, did not address the perhaps more common situation of statements accusing a competitor of trademark infringement, which might be more clearly within the category “commercial activities.”

Also, Oey didn’t disparage TFN’s goods or services; rather, many of his statements “appear aimed at ensuring the ongoing success of TFN and its services.” He said things like, “Let everyone know that TFN does not need to control freecycling for TFN to be successful”; “[Keeping the term ‘freecycle’ in the public domain] fits well with a ‘viral’ marketing approach to freecycle. People hear about it and want to know where it came from--which will lead back to [TFN] without strong trademark enforcement. It will also generate lots of goodwill”; and “My alternative also has consequences but I firmly believe it is a much better choice for [TFN] in the long run.” (TFN might consider itself damned with faint praise.)

TFN also alleged “trademark disparagement” under §43(a). But no such claim exists; TFN’s allegations of false statements, made with malice, about TFN’s mark, track a common law slander of title claim. The court found no textual basis for a Lanham Act claim from these elements, and a corresponding absence of precedent supporting them. Even if trademark disparagement were cognizable under the Lanham Act, TFN didn’t show likely success because Oey’s statements weren’t false. “At worst, Oey offered an erroneous legal opinion (by a layperson) that TFN lacked trademark rights in the term ‘freecycle.’” And statements of opinion aren’t generally actionable under the Lanham Act. There has been no formal determination yet that TFN has trademark rights in “freecycle.” Oey’s statement that TFN lacks such rights can’t be a false statement of fact until those rights are definitively established. And, the court added, Oey would in that case remain free to argue that the decision to grant TFN such rights was a mistake.

TFN’s basic complaint is that Oey shouldn’t be allowed to use or encourage the use of “freecycle” in its generic sense. But the court held that TFN’s mark, like all marks, is always at risk of becoming generic if the relevant public appropriates it. Genericide has both social costs and social benefits for communication. Trademark owners are free to undertake PR campaigns and police a mark’s use. But the Lanham Act doesn’t grant this kind of policing power. The court expressed no opinion on whether genericide was an available theory under other causes of action, and declined to address the First Amendment objections to TFN’s legal campaign, leaving those matters for the district court on remand.

Informal formalities

BNA reports that, at a Sept. 18 Pike & Fischer event, "Legal Risk Management in a Web 2.0 World," Matt Schruers, senior counsel for the Computer & Communications Industry Association, said something very interesting: the technological solutions being implemented by many sites to screen for content posters do not have authorization to post may be reinstating formalities sub rosa.

These technological measures compare submissions to a central database, for example of songs, but only a small fraction of copyright-protected performances are in the database. "We thought that abolishing formalities would protect the little guys," Schruers said. "Instead, we've seen the large content providers drift back towards a form of private-sector protection of content that may end up leaving the smaller players by the wayside."

Separately, Patrick Ross, the executive director of the Copyright Alliance, spoke at the conference. I found one remark particularly telling: "Whether the DRM is on a service sponsored by a rights holder, or is used by an upload service to ensure copyrighted works are treated differently than user-generated-content, there will always be a role for DRM" (emphasis added).

We tell our students that all works are born copyrighted now, that copyright is no longer a verb. (As the Copyright Alliance site puts it, "In fact, every time a child takes crayon to paper, he or she has created a copyrighted work ....") But the fact that even Mr. Ross, whose organization defends strong and ever-increasing copyright rights, thinks in terms of works that are really copyrighted versus those that aren't is evidence that an affirmative desire to claim rights is still important in our moral and practical evaluations of various copying practices.

Copyright minimalists like me are fond of formalities. We have talked a bit about lack of notice as unfair surprise; perhaps, following on Schruers's observations, we should also talk about the importance of public regulation rather than informal formalities created by private parties.

Is it safe?

The debate over social networking sites and child protection took a turn towards false advertising law, with NY's AG subpoenaing Facebook about protecting users from child predators. According to a letter the AG sent to Facebook: "To be clear, within the constraints of the law, Facebook has the right to operate any type of Web site it deems fit. However, it does not have the right to represent that its site is safe and that it promptly responds to complaints when such statements are not accurate." (AG's press release -- contains explicit content.)

Facebook's response was extremely conciliatory, which is not surprising given the cultural power of the child protection theme.

It took popular anxiety, and regulatory attention, about a year to get to Facebook. Could this be related to the class differences between MySpace and Facebook?

Copyright and media literacy

American University, Washington College of Law, The Cost of Copyright Confusion for Media Literacy (program sponsored by WCL’s Program on Information Justice and Intellectual Property, AU’s Center for Social Media, and the Media Education Lab at Temple University). Webcast here.

Renee Hobbs, Professor & founder, Temple Media Education Lab: When she first started teaching teachers, she used everything: books, magazine covers, commercials, movie clips, anything was an artifact she could use to discuss critical media thinking skills. Gradually, one question became more prominent. In the 1980s, only a few teachers would ask, but by 2000 it was almost their first question when they began media literacy studies: “Did you have to get permission to use that?” Or, “Can I get in trouble if I use those?” The climate is one of fear.

The study released today is based on interviews with 63 media literacy educators across the country, in high schools, universities, arts centers, elementary schools, libraries, and other places. They discussed how they use copyrighted materials in their work, how students use copyrighted materials in schoolwork, and how teachers use copyrighted works in teaching. Hobbs showed a beta version of a video outlining the findings. In brief: Teachers are afraid to share teaching materials; teachers are afraid to let students use the copyrighted works that mean so much to them in creating their own productions. But copyright law is more favorable than many think; Peter Jaszi says “Fair use is like a muscle. It needs to be exercised.”

Peter Jaszi, Washington College of Law: Teachers experience copyright as a burden on practice when it should be an engine for production and republican discourse. The challenge is to find our way back to the original understanding. The way back is substantially through the fair use doctrine. The interviews revealed an irony: as the fair use doctrine has grown in the courts in recent decades, teachers have grown more afraid to use it, as Hobbs described. The potential remains, aided by judicial sensitivity to the consensus of various practice and use communities on what uses are fair. So practice communities must reclaim fair use for themselves. Specifically, the media literacy education community should take charge of its own fair use doctrine, producing a consensus code of best practices. This would improve practices among teachers, discourage overreaching copyright claims, and help in any unlikely judicial test. This use of best practices isn’t just theoretical; documentary filmmakers have already used best practices to improve matters for themselves.

Pat Aufderheide, Professor & Director, Center for Social Media: Studies reveal that people have no idea how widespread their problem is – in the interviews, they thought they were just being bothered by a picky administrator, or that they were unsure but others knew. Their experiences were not idiosyncratic, but systemic. (Comment: Best practices as consciousness raising?)

Documentary filmmakers believed that their opinions wouldn’t make a difference – at the beginning of that project, filmmakers told Aufderheide to go talk to insurers and network broadcasters, because filmmakers didn’t have the power. But the filmmakers did have the power to change the risks (or risk perceptions) of those other groups by creating best practices. And right after the best practices report came out, insurers and broadcasters began to accept compliance with its recommendations instead of permissions.

Kenneth Crews, Indiana Law/IU School of Library & Information Science: His background is in fair use guidelines, and he wants to emphasize their troublesome aspects. The central clash is between the law of fair use and the guidelines as a surrogate or replacement of the actual law. Invariably, guidelines (photocopying, multimedia, etc.) are much more restrictive than fair use actually allows, and often much more complicated and difficult to apply than the law of fair use. We should take guidelines with a grain of salt, keeping an eye on who they’re from, fighting the climate of fear, and embracing uncertainty – which is another word for flexibility, one of fair use’s greatest virtues. Teachers and others should make judgment calls based on the four statutory factors.

Implications for Media Literacy Teachers

Shay Taylor, Montgomery Blair High School: Teaches media production and analysis to 10^th graders, along with electronic newsgathering and production, and the school television program (like a super-school paper with engineers, PR people, internet division, etc.). When she began teaching, she had all sorts of great media example. Then she heard from a teacher that someone else had heard that someone had said that you could get in trouble for using media in the classroom. What if a student’s parents are lawyers and hear about what they’re doing in class? She was ready to give up and teach math, but decided that the cost of copyright confusion was much greater than dollars and cents. Even in a county where almost every high school has a media program, media teachers don’t get together and talk about these issues.

Karen Zill, Alliance for a Media Literate America: The problem is not just teaching media literacy but using media to teach any subject – there’s a reluctance among teachers to use up-to-date materials because of copyright fears. They need a comfort zone, and tools for complying with copyright law as well as for interpreting fair use.

Dale Allender, National Council of Teachers of English: There is a pressing need for teacher professional development. Creating a consensus statement on fair use is itself a professionalizing experience, and then applying it in an instructional context will further that development goal. Copyright concerns aren’t new; they tie in to efforts to deal with plagiarism, use of books challenged for content, and interactions with libraries. But our digital age makes copyright more salient – there are increased opportunities to create, to copy, and to disseminate works by teachers and students (the earlier film showed that student productions could easily be uploaded to YouTube, for example). Teachers are now working on best practices in 21^st-century literacy, and use of media technology will be part of that. And that means more attention to fair use.

Question: In a society where people are afraid to let their kids play dodgeball, this seems like a real minefield. Also, what implications does this have for libraries maintaining a set of materials for any teacher to use?

Hobbs: Communities, school districts, and even individual schools have begun to create appropriate use policies, in order to get a handle on the explosion of uses and the environment of fear, uncertainty and doubt. But many of these policies are much more restrictive than the law – e.g., a college professor received an email from provost saying that no professor could use a DVD in class unless it had been purchased by the institution. That has no particular relationship to the law. Teachers have to learn to live with those policies or learn to ignore them, and it creates an extra layer of uncertainty.

Crews: Providing resources on copyright is definitely a role for libraries. Librarians often care more about information-age issues because they see them so often.

Q: Copyright holders are worried and mixed-up too. Couldn’t they be an ally? If schools teach fair use, that would also teach about stealing.

Hobbs: We’re beginning to explore how to engage with copyright holders, including educational publishers and mass media. There is a place of consensus to be found. Many publishers want educators to use their films (e.g., Chronicles of Narnia) for educational purposes. (Comment: given the religious background of the Chronicles, I’m not convinced this is a completely benign partnership. But that’s not so much a copyright issue.)

Jaszi: When copyright owner representatives are brought into these conversations in public or semipublic discussions, they tend to take extremely hard lines. Though in private they are more conciliatory, they feel pressure to be extreme in public. So the better idea is for the user community to take the lead and relieve copyright owner representatives of the very problematic burden of participating in a consensus-building exercise with a use community. If the practice community comes to a reasoned and reasonable position on fair use, it will then be possible for copyright owners to endorse either explicitly or implicitly. Inclusion at the early stages of consensus-building is harmful, though.

Aufderheide: It’s clear that copyright representatives will let hell freeze over (or the ice caps melt) before saying publicly that fair use exists. But they can live with other people saying it. Copyright owners want to use the filmmakers’ guidelines too, even though their participation would have killed the project before it got off the table; now that exists, they like the ability to say “this goes beyond the guidelines” when some entity threatens to use without permission and claim fair use unless it gets a lower license price. (This story, by the way, seems to strengthen Crews’s point.)

Q: What about the Hollywood guilds, which take a harder line than even copyright owners and would prefer to ban any unauthorized use of a television show in class?

Crews: At least with respect to the creative content, writers’ and others’ contributions are bundled into the copyright rights. The more complicated the creative structures get, the harder it is to get real permission, and thus the more important fair use becomes.

Q from documentary filmmaker: If you buy a film for your home use, can you take it into the classroom and show it?

Crews: If there were a valid license to which I agreed saying home use only, then no. But what if the box says “home use only”? That is not a contract and you can show it in class.

Hobbs: But this is an example of pervasive confusion. (And, I would add, encouraged by copyright owners with their overreaching claims on DVDs.) Media literacy educators understand that messages are interpreted, and it’s by interpretation that we learn and understand fair use.

Q from earlier filmmaker’s partner: Half of our income comes from educational sales. We experimented with home video, but teachers stole our product – it clearly said on the box, “educational use prohibited.” Would showing the entire hour of our show be fair use?

Crews: The question is “can a teacher show the whole thing in the classroom?” and the answer is “yes,” but not because of fair use. There is a specific section of copyright law apart from fair use that clearly says lawfully made copies of the video may be performed in face-to-face instruction. There is no amount limit. If you really want to split the market, a label on the box is not enough. It has to be a real part of the contract. As an educator, Crews urges creators not to do that.

Q: But this limits sales to the general public. We sell to libraries, schools, and colleges. But if we sell it as a home video, that destroys our market. We can’t afford to sell it to the general public if teachers are going to steal it.

Aufderheide: This is an important area of real disagreement, and the filmmakers are not fair use haters. The two-tier pricing model for documentaries is falling apart, and creating real problems for filmmakers.

Q: The DMCA now allows media educators to use film clips from DVDs. Will this exception continue to be focused on film professors?

Jaszi: We will be back for that exception next time. He expects that other use communities will try to make the same demonstration of need. Many other teachers have pedagogical needs for clips.

What would Jesus wear?

It's Kerusso day in the trademark blogosphere (blogomarble? blogopea? smallish, anyway), and here are my entries:
Because it holds out the prospect of a more even PR battle than the one between the Red Cross and Johnson & Johnson.

Because my daughter is right now wearing a very similar onesie with a happy bunny that says "I'm cute. I get it. Now put me down." (Side note: what does Apple think of this Happy Bunny product, the iPod bunny?) I think the "critique" argument is much more powerful here than it is for some of the other shirts; this Kerusso shirt is deliberately opposed to the irony and snark of the original. People like me have asked whether it is possible to parody the postmodern, parodic, ironic sensibility that produced The Simpsons and Happy Bunny; perhaps the answer is that these things can be parodied with sincerity.

Because it raises one of my favorite problems: use as a mark. Linguistically, the sentence on the shirt is a classic descriptive use. But add in the font and the size of "my space," and matters differ a bit.

Because I miss Reese's Peanut Butter cups, and because there's already been litigation over the fame of the trade dress, though matters are more favorable for Reese's here given the use of the font and the crinkle-edged block of brown that traditionally signals the presence of delicious chocolate and peanut butter candy.

Because Claire Bennet returns tonight!

Final note: the John Deere/John 3 T-shirt featured in Marty Schwimmer's post seems to have been removed from the Kerusso site already, perhaps at the behest of a John Deere lawyer. John Deere has been willing to litigate dilution before. Claiming religious freedom might not be enough to deter every trademark owner whose marks Kerusso borrows.

TerraCycle settles with Scotts

Scotts and TerraCycle have settled. (Previous reports.) TerraCycle will change its packaging color scheme, stop making superiority or establishment claims about TerraCycle versus Miracle Gro, and wind down its website suedbyscotts.com. The CEO even said, “We also regret certain statements that were made about Scotts in the heat of litigation.” A pretty satisfactory result for Scotts, especially as it ends TerraCycle’s media defense blitz. As Seattle Trademark Lawyer reports, Scotts even got a statement about the fame of its trade dress into the stipulation.

ETA: the settlement specifies the circumstances under which TerraCycle can make establishment/comparative claims: only when it has "at least one well-conducted scientific study, carried out after the Effective Date by an independent person or organization, using generally accepted scientific techniques, and reaching statistically valid conclusions. The full report of any such research, if relied on by TerraCycle to substantiate new comparative advertising claims, shall be published by TerraCycle on the Internet or otherwise made available to Scotts and the consuming public." This is a reasonably flexible limit; it does require more substantiation than some superiority claims would in the absence of a settlement, so Scotts gets something, but not in a way that prevents competition. One deviation from the baseline false advertising law is the requirement of independent testing; internal testing would ordinarily suffice, though of course lack of independence can always affect a factfinder's assessment of the credibility of a test. The other big deviation is that the burden is on TerraCycle, whereas the baseline would require Scotts to show falsity.

On the other side, apparently TerraCycle will continue to employ the people whose livelihoods were threatened by the lawsuit. If TerraCycle’s PR is as good at selling worm poop as it is at getting out the word about this suit, the company will do very well indeed.

So, it's a prequel to a bigger con?

The interior illustration for the NYT's review of Jeffrey Toobin's new book on the Supreme Court, The Nine:

The MPAA has gone after unauthorized uses of its rating systems in expressive works before, sending cease & desist letters to fan fiction sites, for example. But will it challenge the No Longer Gray Lady? And, more important, what the heck did Toobin find out that justifies an R rating?

Battle of the real estate web forms

ConsulNet Computing, Inc. v. Moore, 2007 WL 2702446 (E.D. Pa.)

The parties compete to create websites for real estate agents. Plaintiff alleged that Moore posed as a real estate agent to get a ConsulNet website, copied it, and then used the copy to start a competing business, Dynamic Investment Group (DIG). Plaintiff’s websites for realtors are similar to one another, but partially individualized based on things like geographic location. By agreement with Craig Proctor, a Canadian realtor who gives seminars on how to succeed in real estate, ConsulNet’s websites use content created by Proctor. The sites urge visitors to submit contact information in return for access to Proctor’s materials, such as house-selling tips.

Scott Irvin, who was entering the real estate business, asked defendants to create a website for him, providing www.craigproctor.com as an example of the type of site he wanted, and Moore signed up for a ConsulNet website in his own name, though he says he told a ConsulNet employee he was acting on behalf of Irwin; his contract provided that he had only a limited, nontransferable license to use the website for personal use. After Moore’s company entered the business of creating real estate websites, a number of ConsulNet clients left for DIG or added DIG websites to their ConsulNet websites.

Plaintiff sued for breach of contract (Pennsylvania and Canada law), intentional interference with contractual relations (Pennsylvania), and copyright infringement (U.S. and Canada). Defendants counterclaimed for false advertising. The court refused to dismiss plaintiff’s contract and copyright claims. Though defendants argued that the similarities between the sites were conceptual and systemic, not expressive – as evidenced by numerous places in the record where both expert and lay witnesses noted the common concept or system behind the websites -- this is a classic jury issue. A jury could find similarity in the expressive “look and feel” of the sites. (For example, a DIG webpage was headed “Don’t sign another lease until you have read this special report!” while a ConsulNet page was headed “Don’t Pay Another Cent in Rent to Your Landlord Before You Read This FREE Special Report.” The text underneath is also pretty similar.)

Defendants’ false advertising counterclaims were based on three statements: “(1) that ConsulNet’s websites obtain a 10.5% response rate, i.e., that 10.5% of visitors submit identifying information to the website; (2) that ConsulNet’s websites, once established, are ‘worry-free’ and ‘automatic’; and (3) that ConsulNet websites make it ‘possible to triple your real estate sales while working no more that a standard 40-hour week.’”

From a consumer protection perspective, the relevant ad materials are a little distressing. ConsulNet advertised that its “top performing” “branded” websites had a 10.5% response rate, and its “unbranded” 30.5%, as compared to the industry average of 0.5%-2%. (Later in the same materials, it dropped the “top performing” modifier, which is what caused the controversy.) “Branded” sites are those that obviously belong to and promote particular realtors, while “unbranded” “appear to be simply informational websites for potential buyers and sellers” – DIG stated that “The only difference [between the two kinds of websites] is that on the unbranded site we’ve removed anything that made it look like a typical real estate agent site.” This suggests that neither party is behaving all that honorably towards the consuming public, since the unbranded sites are more than simply informational.

In any event, ConsulNet argued that it was making truthful statements about its “top performing sites.” The court agreed that, in context, the 10.5% claim was a reference back to “top performing.”

ConsulNet also argued that statement (2) was mere puffery. ConsulNet advertised: “You don’t need to know anything about computers or the Internet! We take care of everything ... site maintenance .... Once it’s online, you don’t need to worry about the site. You simply follow-up on the HOT prospects that are automatically generated for you.” DIG submitted affidavits from former ConsulNet clients attesting that they had, in fact, worried. The court determined, however, that claims to alleviate “worry” were not objectively measurable, but merely vague puffery.

Statement (3) is measurable, but DIG didn’t submit sufficient evidence of falsity, just two affidavits from ConsulNet clients who weren’t able to triple their businesses. DIG needed evidence of the results “generally achieved” by ConsulNet’s thousands of clients. (Actually, some of the court’s language suggested that DIG would need to show that tripling sales wasn’t even “possible,” though that may be going too far; the FTC takes the position that, absent really clear disclaimers, representations of success are generally understood to reflect average or typical results.)

DIG had a separate Lanham Act counterclaim based on disparagement because one of the individual counterclaim defendants allegedly told Richard Wall – a former ConsulNet client who’d switched to DIG – that he’d “better come back before [he was] dumped.” Wall interpreted this comment to mean that ConsulNet was going to put DIG out of business. The court ruled that such a stray remark could not constitute “commercial advertising or promotion” within the meaning of the Lanham Act.

I've been living in your cassette

iPod Nano cases made from genuine cassette tapes. Infringement? Dilution? Are these genuine goods too far altered to be legitimately resold? They are certainly no longer fit for their intended purpose, but that's so obviously the point that I doubt it has the usual relevance.

Ve ri wrong

Harvard's Coop bookstore apparently (though never underestimate the capacity of general news reporting to distort IP issues) is claiming copyright in its prices. The Crimson article on the subject, however, refers to the Coop's objection to copying the ISBN numbers. Even if the Coop could get some help from the cases suggesting that price estimates can be copyrightable (which I doubt, unless the Coop sets its book prices in a very surprising way), the problem with claiming IP rights in ISBN numbers is even worse: the Coop isn't the copyright owner!

The fellowship of the net

Is it just me, or is The Tower in this ad reminiscent of something?





(And there's a video.)

HearUsNow is clearly a takeoff on a popular cellular slogan -- and since it's the name of the organization, it's probably not use otherwise than as a mark. Should it nonetheless be protected against dilution claims? I think the answer is pretty clear, but I would offer this as an example of why the TDRA's exclusions don't solve the First Amendment problems of dilution.

... and that branch just slapped me in the face

Best mixed metaphor referring to the just-passed FDA reform bill, as reported in this NYT story: “'It’s a Christmas tree with more moving parts than you can imagine,' said Peter Barton Hutt, a former F.D.A. general counsel.” The bill generally increases the FDA's power to order drugmakers to do and disclose things.

Update on medical foods

Midlothian Laboratories, L.L.C. v. Pamlab, L.L.C., 2007 WL 2702049 (M.D. Ala.)

Midlothian moved to reconsider the district court’s ruling that Pamlab’s false advertising counterclaim should go to trial. The earlier ruling was based on Midlothian’s claims that its product was a “generic” equivalent and “bioequivalent” to Pamlab’s medical food Foltx, when at least one test of Midlothian’s product revealed that only two of three of Foltx’s active ingredients were present. The parties informed the court that it was mistaken about the product on which that test had been run: it was Foltx. (Whoops.) As a result (and because Pamlab apparently had no other evidence of falsity, once its argument that the very terms “generic” and “bioequivalent” necessarily implied FDA-level substantiation was rejected), the court granted summary judgment for Midlothian.

Stop the spread of ads that cause misconceptions

The FDA issued a warning letter against advertisements for Vicks foaming hand sanitizer that claimed the product prevents the spread of viruses that cause colds and suggested using the product when soap and water is unavailable, when FDA guidelines for the active ingredient indicate it should be rinsed off. Ads for the newly launched product, targeted at parents concerned for their children, remain available for the moment. The FDA says that the claims of cold prevention (for which the FDA is aware of no evidence) and instructions that the product can be "le[ft] on" render the product misbranded.

Informed consent and consumer protection: the case of abortion

Acuna v. Turkish, --- A.2d ----, 2007 WL 2609054 (N.J.)

Rosa Acuna filed a malpractice action against Dr. Sheldon Turkish, her obstetrician-gynecologist, alleging that he failed to provide her information necessary to her informed consent to an abortion. She claimed that he should have told her “the scientific and medical fact that [her six- to eight-week-old embryo] was a complete, separate, unique and irreplaceable human being” and that an abortion would result in “killing an existing human being.” The basic theory was that a doctor must, before performing an abortion, “advise the patient in clear and understandable language that ‘the family member [the embryo] is already in existence and that the procedure-indeed the central purpose of the procedure-is intended to kill that family member.’” Otherwise a woman is not making a fully informed decision to abort. (For an overview of this strategy for discouraging abortions, see Reva Siegel, The New Politics of Abortion: An Equality Analysis of Woman-Protective Abortion Restrictions, 2007 U. Ill. Law Rev. 991 (2007).)

In this case, the New Jersey Supreme Court rejected Acuna’s argument and reinstated the dismissal of her suit. A doctor “unquestionably has a common law duty to provide a woman with material information concerning the medical risks of a procedure terminating a pregnancy,” the court was unwilling to extend that to a suggestion that abortion is tantamount to murder. There is no consensus, either among the medical community or the general citizenry, that the statements Acuna wanted are “medical facts” as opposed to ethical beliefs.

The disputed facts shouldn’t matter, but – perhaps unsurprisingly -- the court did recount disagreement between the parties over who brought up the subject of abortion (each identified the other as the culprit), as well as facts about Acuna’s reproductive history and general health that might seem to justify an abortion to those who feel that justifications are required. (The not-so-hidden narrative here is one of the plaintiff’s regret of her voluntary choice.) Acuna said that she asked if “the baby” was “in there,” and that Turkish replied, “don’t be stupid, it’s only blood.” Turkish didn’t recall his specific response, but thought he likely told her that a “seven-week pregnancy is not a living human being,” but rather it “is just tissue at this time.”

In deposition, Acuna stated that she knew she was pregnant, but she wanted to know if there was “a baby” in her, by which she meant a “human being.” She understood that, without some intervening event, a child would be born to her, but she wanted to know whether she was carrying “an existing living human being.” After meeting with Turkish, Acuna consulted with her husband, returned to Turkish’s office three days later, and signed a consent form acknowledging that the “risks and complications” of the procedure had been explained to her. Turkish performed an abortion.

Acuna had continued bleeding, and was ultimately admitted to the hospital, where she was diagnosed with an incomplete abortion. A nurse told her that Turkish “had left parts of the baby inside of you.” (The court noted that the pathology report contradicted this statement.) Upon her release, Acuna began researching early pregnancy, trying to make sense of the nurse’s remarks and Turkish’s statements, and eventually “concluded” – the court’s term – that the abortion killed “a human being.” She suffered as a result, and was later diagnosed with post-traumatic stress disorder.

Acuna sued for malpractice. Her informed consent claims stated that Turkish wrongly failed to inform her that (1) “[Andres] Acuna, although a person unborn, was a complete, separate, unique and irreplaceable human being”; (2) there existed the potential risk that Andres “was capable of experiencing pain” at eight weeks gestation; (3) abortion involved “actually killing an existing human being”; (4) she would be at risk of suffering from “post-abortion syndrome,” a form of a post-traumatic stress disorder; and (5) she would come to realize that she “was responsible for killing her own child” and bear a weight of guilt for the rest of her life. Had she received this information, she alleged, she would not have had the abortion.

After various motions and appeals, the trial court ruled that, though emotional distress claims were available against a doctor who failed to obtain informed consent before performing an abortion, Acuna had failed to demonstrate that Turkish withheld material information that a reasonably prudent woman would need to know. Instead, by asking a doctor to state that an embryo is “a complete, separate, unique and irreplaceable human being” and the like, Acuna was asking for value judgments, not medical facts. The court of appeals, however, found a material factual dispute over whether Turkish accurately answered Acuna’s question, “[I]s the baby already there?” and thus remanded for trial.

The Supreme Court agreed with the trial court. Despite the “don’t-be-stupid-it’s-only-blood” remark, Acuna understood she would, unless something changed, have a child in seven months; she did not interpret Turkish’s statement to mean that there was anything wrong with the embryo. Nor did she rely on Turkish’s alleged claims that her health would be endangered absent an abortion (though she did argue that she would have scrutinized the health risks more closely had she known “her baby was already there”).

Giving Acuna’s proposed warnings, moreover, has disadvantages. Turkish and amici argued that these warnings would force doctors to take sides on highly charged issues, unconstitutionally burden women’s right to choose, and violate the First Amendment’s prohibition on coerced speech.

Despite the contentious subject matter, this is in fact the classic dilemma of consumer protection regulation: information that helps some people hurts others. Even when we discount problems of preference formation (which are foregrounded here by the very content of Acuna’s list and by the possibility that suggesting to women that abortions produce post-abortion syndrome itself helps produce symptoms, or at least attribution of symptoms to the abortion rather than other factors), information that would help some women implement their preferences would hinder others.

Informed consent is medical information “that a reasonably prudent pregnant woman in like circumstances would have considered material before consenting to a termination of pregnancy.” “Like circumstances” provides some possibility for tailoring the duty to the woman, except that there is really no way for doctors to tell in advance who would want to hear that an embryo is an existing human being. Proponents of a duty to disclose Acuna’s list (1)-(5) are really arguing that the risk to every woman of coming to realize that she killed a human being is so great, and the harm to her if she foregoes an abortion she truly desires so minimal, that every woman should hear this cautionary list.

Without getting into these intractable preference problems, the court looked at general professional norms. Acuna had no evidence that any doctors currently give such warnings, nor that any jurisdictions impose common-law duties to do so. Requiring doctors to say that aborting an embryo is the killing of an existing human being would suggest “that both the doctor and patient would be complicit in committing the equivalent of murder.” This conclusion has been rejected both by New Jersey’s legislature (by enacting a wrongful death act that doesn’t cover fetuses and by refusing to classify fetuses as persons under homicide statutes) and by the Supreme Court in Roe and Casey.

I don’t find the professional norms argument particularly persuasive; absent government regulation, you wouldn’t find many cigarette companies warning about the health consequences of smoking, either, since it’s not in their interest to do so. But the lack of consensus on what the truth of the matter is, as reflected in practice and legislation, is more significant. In general advertising law, as in defamation, this is the fact/opinion divide. Though often spoken of as a subset of puffery, the fact/opinion divide serves to keep advertising law from regulating at least some attempts to affect preference formation. Here, informed consent strives to to target nearly universal preferences (to live, to avoid pain). Disclosures generally imply not only that the disclosed information is material but that it ought to be material to the consumer; in that, disclosures are no different from other explicit ad claims. Mandating a disclosure means taking a side in a debate; here, however, there is no general scientific or social consensus on the right side.

Consensus, of course, is not required for most government-imposed requirements, but it is relevant either if the common law punishes only clear departures from standard practice or if some constitutional right is implicated. After discussing Roe and Casey’s avoidance of the conclusion that a fetus is an “existing human being,” the court noted that Casey indicated that doctors might have some First Amendment rights relevant to compelled disclosures. For a detailed discussion of this last point, see Robert Post, Informed Consent to Abortion: A First Amendment Analysis of Compelled Physician Speech, 2007 U. Ill. Law Rev. 939 (2007).) Moreover, a South Dakota statute requiring similar disclosures has been enjoined (pending review en banc) on First Amendment and due process grounds. That statute, though democratically enacted, “is pushing the doctrine of informed consent to the edge of a new constitutional fault line.” Rather than reaching the constitutional arguments, the court simply declined to stretch the common law so far.

The court didn’t specifically address Acuna’s claims (2) (fetal pain) and (4)-(5) (post-abortion guilt). These appear at first glance to be more capable of scientific resolution, though that apparent falsifiability may quickly dissolve in debates over what it means to feel pain and the difficulty of determining whether abortion differs from childbirth in its effects on the mental health of similarly situated women. The professional consensus against Acuna's position is significant here, though the relevant profession isn’t doctors but people studying the particular subjects at hand.

In general, however, legislatures – and even courts -- can take sides on disputed factual issues. The FDA does so routinely. A physician who didn’t believe that a particular drug posed certain risks considered well-established by the FDA could certainly be held liable for failure to disclose those risks – this is one reason the black-box warnings on antidepressants for teenagers have been so controversial: they deter prescriptions by doctors who disagree with the FDA’s assessment, but fear liability. In many cases, we’ve simply taken it for granted that we can compel speech by doctors, drugmakers, and commercial speakers in general.

If the doctors in South Dakota have a good First Amendment argument, in other words, then the FDA needs to worry. I recommend Post’s article; informed consent and advertising disclosures have a lot in common, especially from a First Amendment perspective, even though they’ve rarely been considered together.

NYT director of advertising acceptability answers your questions

Or at least reads them. Story here.

The hate that dare not speak its name

Oklahoma ex rel. Edmondson v. Pope, -- F.Supp.2d --, 2007 WL 108943 (W.D. Okla.)

In January 2006, Pope hired a company to call thousands of Oklahomans and play a prerecorded message:

Stand by for an important message. Hear County Commissioner Jim Roth speak of his success in advancing the homosexual agenda in Oklahoma County. Including homosexual language into the county personnel handbook and fighting to keep homosexual books in the children's section of the library. Commissioner Jim Roth will discuss his role in advancing the homosexual political agenda on Monday, January 30th at 6:30 p.m. at Epworth United Methodist Church. Stand by for a one question survey. If you think that Commissioner Roth should continue using his position to advance the homosexual agenda press one, if you do not, press two. Thank you.

The message didn’t identify defendant or provide his contact information. (Background, and laughable defense from Pope that he was "promoting" Roth's speech, here. Roth is in charge of things like this parking garage project; I was not previously aware that shovels possessed a sexuality.)

At least nine recipients complained to the state attorney general about the calls. The issues were whether the “technical” standards of the Telephone Consumer Protection Act ("TCPA"), 47 U.S.C.A. § 227 (requiring identifying information to be included in prerecorded calls to residences) applied to political messages, and if so whether the TCPA violated the First Amendment.

The court held that the TCPA did apply. By statute, the FCC is allowed to exempt certain calls from the general prohibition against prerecorded calls made without prior consent, and it has done so for prerecorded calls not made for a commercial purpose. Pope’s calls clearly fit within the exemption. But the court ruled that, based on clear statutory language, even automated calls exempted from the prior consent requirement needed to comply with the technical requirements (which include both identification and a provision that the caller must release the line shortly after a hang-up).

Thus, the court turned to the First Amendment claim: political speech can’t be regulated in this way. I haven’t read the briefs, but it appears from the discussion that the state argued that the proper body of doctrine was public forum doctrine and that, because the telephone system is private but heavily regulated, the lower standard applied to regulation of speech in nonpublic forums should apply, allowing content-based (though not viewpoint-based) discrimination.

Wow, that could probably be more wrong, but it’s not clear to me how. The phone system is private property, but the phone system isn’t the speaker and is in fact compelled to offer carriage to everyone who can pay. It’s not like a newspaper or other private intermediary choosing what speech to publish. And in terms of government property, unlike even public parks, the phone system is designed for speech and there aren’t nonspeech activities with which particular calls compete. The idea that the government could decide that speakers uttering nonobscene sexually explicit content can’t use the phone lines, because they’re a nonpublic forum, is a bit surprising. You could, I suppose, analogize prerecorded messages to loudspeaker volume, both technological innovations that allow greater message penetration at the cost of greater annoyance to people at home, but I don’t see that public forum doctrine is relevant to that.

The court modestly declined to reject the state's manifestly silly argument. Rather, it ruled, the key is that the TCPA regulates all prerecorded messages and is content-neutral. The legislative purpose was “to protect consumers from unwarranted and intrusive prerecorded calls,” regardless of the message conveyed. Intermediate scrutiny applied: content-neutral time, place, or manner restrictions are okay if they’re narrowly tailored to serve a significant governmental interest and leave open ample alternative channels for communication. Since everything you can say with a straight face is a significant governmental interest, the keys here are narrow tailoring and alternative channels.

The court found that the technical requirements “allow people receiving those calls to contact someone regarding future calls and to have use of their telephone line after hangup.” These were narrowly tailored measures “to remedy the underlying problems previously experienced with anonymous prerecorded message calls.” And they only incidentally restricted Pope’s ability to spread his message. Pope could have called residences uninvited without providing identifying information, if he’d called himself or used live operators, or he could have provided identifying information. Given the harm inflicted on thousands of Oklahomans – “uninvited calls on their home phones that contained a prerecorded, politically-oriented message with no information about its source or how to avoid subsequent intrusions” – this was a minimal burden.

The court also rejected Pope’s selective enforcement claims.

This all makes sense, except for the bit we rushed over in the beginning: content neutral? A regulation requiring all communications to include a specific piece of information – a name and other contact information – is content neutral with respect to what the speaker wants to say, but content-based with respect to what she doesn’t, if she wishes to remain anonymous. McIntyre v. Ohio Elections Comm’n, 514 U.S. 334 (1995), a case mysteriously absent from the opinion, discusses reasons why governments want to regulate anonymity and why people might want to remain anonymous; those reasons, I submit, make regulation of anonymity content-based. (In a footnote, the court cited Talley v. California, 362 U.S. 60 (1960), another anonymous leafleting case, but distinguished it on the grounds that (1) there was no concern over fears of reprisal from unpopular speech here (wrong, to the extent it was even relevant to this facial challenge), and (2) the privacy interest here is greater.)

I am not arguing that the interest in residential privacy cannot sustain the regulation – it might – nor that other interests, such as those animating campaign finance regulation, cannot justify disclosure requirements for large-scale political speech of the type in which Pope engaged. Those are the things we should be talking about, rather than pretending that the regulation is content-neutral. Indeed, such a discussion might suggest that disclosure of contact information – specifically, a number someone could use to say “never call me again!” – addresses the relevant interests well enough that a ban on anonymity cannot survive. Anonymous unsolicited recorded calls might well be perceived as more intrusive than non-anonymous unsolicited recorded calls, so there’s still some privacy justification for a disclosure requirement. But since a political caller gets one free smear under the TCPA, it’s at least worth considering the extra benefit added by a name disclosure requirement.

Celebrity branding misfires

Article, and related slideshow, here. Note the reference to Tiger Woods; the author makes the same point (does anyone really believe Woods drives a Buick?) as the Hallmark card in Hallmark's line of celebrity "paper dolls." (Also, points to me for predicting the Hallmark/Paris Hilton battle.)

Book chapter: Truth and Advertising

This is my contribution to Trademark Law and Theory: A Handbook of Contemporary Research (Graeme B. Dinwoodie and Mark D. Janis, eds.) (Elgar, forthcoming 2008). It is an overview of my work on the Lanham Act and the First Amendment, with special attention to ways in which dilution law breaks the tradition of regulating the informational content of commercial speech and attempts to regulate its emotional content.

The color purple

A well-known book; not so well-known as a mark for 3M's abrasive products, it seems. The TTABlog reports on the TTAB's ruling, after a hard-fought battle that included a consumer survey by the opposer, denying registration to 3M on the ground that purple had not acquired distinctiveness and was in any case functional.

The well-advised 3M promoted its products with the following slogans: “Ask for it by color, not by name” and “If it’s Purple, it’s from 3M.” The evidence was, however, that numerous producers of abrasive products used purple. So the slogans attempted to create trademark meaning in consumers' minds (though the TTAB found that 3M had failed in this aim), which is ordinarily acceptable, but especially the latter one strikes me as potentially false advertising. A consumer who believed this would either start being confused about the source of other, existing purple abrasives -- which seems counter to the ordinary purpose of trademark, to reduce search costs -- or would regard the other producers as infringers, a sort of reverse confusion situation.

Trademark relies on shaping consumer understanding, of course, but it seems that the preexisting understanding here raises unfair competition questions when 3M tries to appropriate for itself what others have freely used. Precisely because we're used to word marks, we don't usually require instruction to regard them as marks -- even if a particular term is descriptive. But color, like other forms of trade dress, is usually perceived by default as decorative or functional rather than source-indicating. So creating trademark meaning may require aggressive, explicit instruction of consumers in a way that's uncommon with word marks. And that instruction itself may at least start out making false claims about meaning -- but if it succeeds, those claims are no longer false! This is a largely unrecognized problem in regulating false advertising, one I'm exploring in the paper I'm giving at WIPIP later this month.

(Side note: opposer's survey used orange sandpaper as a control against purple; the survey expert contended that, when the percentage of respondents who claimed that orange was a source indicator was subtracted from the percentage who said the same of purple, the net recognition was 6%, "about the same level you’d expect just based on noise or error.” But that quote is deeply misleading, since the control itself is supposed to account for noise and error. Six percent should not suffice to show secondary meaning for color; but neither should double-counting be rewarded.)

Oenofraud

Slate and the New Yorker on the problem of fraud, and the related but distinguishable issue of changing consumer expectations about what a label means, in older wines. If a now-famous vintage was made very differently 50 years ago, including having other grapes added, or if it was "refreshed" with newer wine as was apparently customary until recently, is it really the same wine? You would think, with all the fuss about designations of origin in wine, these practices would be heavily regulated, but they don't seem to have been.

(Medical) food for thought: latest in Lanham Act/FDCA intersection

Midlothian Laboratories, L.L.C. v. Pamlab, L.L.C., --- F.Supp.2d ----, 2007 WL 2458409 (M.D. Ala.)

Time for more fun with the FDA! Plaintiff makes generic versions of prescription drugs and vitamins. Defendant is a competitor and owns a federal registration for FOLTX for a folic acid/B-complex medical food supplement, marketed to physicians for the treatment of B12 deficiency. Plaintiff sued for false advertising and to cancel defendant’s mark. Defendant counterclaimed for false advertising.

Foltx is a “medical food,” defined by law as a food formulated to be used under a doctor’s supervision for dietary management of a disease or condition with distinctive nutritional requirements. Under FDA rules, “[m]edical foods do not have to include nutrition information on their labels, and their claims do not need to meet specific standards.” As a result, medical foods are much less regulated than other foods intended for general consumption. The FDA considered regulating them using drug-type standards, but gave up in 2004 for lack of resources. So medical foods are also much less regulated than prescription drugs.

Plaintiff began marketing a medical food with the same amounts of folic acid, B12, and B6 as Foltx, calling it a “generic equivalent” and “bioequivalent” to Foltx. Rather than marketing to doctors, plaintiff markets to drug wholesalers and retailers including pharmacy chains. They may – and in some cases by law must – substitute a generic product when filling Foltx prescriptions.

The manufacturer of plaintiff’s products analyzed each batch and measured the active ingredients; plaintiff never asked for a report on any batch until after March 2005, more than 14 months after it had begun marketing. At least one test revealed that one of the active ingredients was missing.

In mid-2004, defendant launched a new version of Foltx with twice as much B12, allegedly because the new formulation would better meet patients’ nutritional requirements. It discontinued the old formulation and recalled the remaining stock, replacing it with Foltx labeled “Improved” and “New Strength.” It mailed explanatory letters to 53,000 pharmacists and 57,000 doctors and published ads in industry media such as Pharmacy Times. The letters announced “an important improvement” based on “SAFETY and EFFICACY,” cautioning that all new and refill Foltx prescriptions should be filled with “New Strength Foltx.” After new Foltx was introduced, two major pharmacy chains stopped buying plaintiff’s product.

Meanwhile, a related company, Red River, began advertising itself as the “sole authorized generic licensee” for Foltx, claiming that its products Folbalin and Folbalin Plus (with the same active ingredients as old and new Foltx, respectively) were made by the same company with the same formula and specifications as Foltx – the manufacturer’s own “generics.”

Plaintiff alleged that defendant abandoned the Foltx mark because the reformulation is too different to be sold under the same mark. Abandonment by this route is difficult and usually requires a product so wholly different as to defraud the public. Variation in product composition is “inevitable,” depending on discoveries or changed conditions. Doubling the amount of an active ingredient was not the type of “extreme discontinuity” that could justify an abandonment finding, at least not without evidence that it transformed the product. Plaintiff pointed out that precedents dealing with non-pharmaceutical products might be too broad, because changes in a prescription formulation could have severe consequences for patients. Here, there was no evidence that this change could have severe consequences; plaintiff’s own expert pointed out that B12 doses of this size were not known to have negative effects.

The FDA, plaintiff argued, had never allowed a company to market two prescription products with different amounts of active ingredients under the same name. But the court refused to determine whether the FDA would consider new Foltx misbranded; plaintiff could petition the FDA for such a finding.

Plaintiff also argued that using the same name for new Foltx and telling pharmacists to fill all old Foltx prescriptions with new Foltx was false advertising, causing consumer confusion about whether it was the same product. Product names can be false advertising – Mylanta Night Time Strength antacid and BreathAsure breath freshener are examples from the Third Circuit. The court found that, “if a mark has not been abandoned, then as a logical matter, a company’s rightful continuing use of that mark, alone, cannot constitute false advertising, because no deception is involved in that continuing use.”

Still, plaintiff contended that the letter to pharmacists was misleading because doctors had written existing prescriptions with old Foltx in mind, so there was no reason to think they’d want the prescriptions filled with new Foltx. The court found that such substitutions could cause valid safety concerns, but that plaintiff’s commercial interests were not harmed by those safety concerns and plaintiff couldn’t act as a public avenger. “In other words” defendant’s instructions weren’t misleading about Foltx “as a product” and thus not actionable. Comment: What? Plaintiff’s commercial interests were quite obviously harmed when defendant told pharmacists they could no longer substitute its generic product; the potential safety concerns are one reason the switch is arguably deceptive.

The court found that, because defendant recalled original Foltx, the statement might not be misleading in any way, because new Foltx was the only version of the product available. (Except for plaintiff’s product, which was – at least on this analysis, but see below – the generic version of old Foltx. A pharmacist who filled a post-recall prescription – which, not incidentally, would have been written for old Foltx -- with plaintiff’s product would be doing the same thing as a pharmacist who filled a pre-recall prescription with plaintiff’s product.)

Plaintiff challenged two other statements: “(1) pharmacists violate the law when they dispense [plaintiff’s] product in response to prescriptions written for new Foltx and (2) new Foltx is safer and more effective than original Foltx.” The first is certainly an important statement, but there was no evidence that defendant actually said it. The second was an argument in the alternative: if the new product isn’t different enough to cause deception when it’s called by the old name, then claims of improvement are false and misleading. The court thought there was a middle ground: a change might be irrelevant for trademark continuity but relevant in a pharmaceutical context.

So, how to analyze defendant’s claims that new Foltx was put on the market for “SAFETY and EFFICACY” reasons? The court found no need to analyze falsity because there was no evidence of materiality. In many circumstances, the court noted, representations about safety and efficacy automatically satisfy the materiality element of a false advertising claim, especially in the context of drugs and medical foods, where consumers are primarily concerned with safety and efficacy.

Here, however, the court found that defendant’s claims can’t be material to consumers’ purchasing decisions, because new Foltx is the only Foltx on the market, and plaintiff’s product isn’t a market competitor. Because plaintiff only markets to pharmacists, doctors never choose between Foltx and the “generic” version; plaintiff’s product is no longer generic for Foltx. Pharmacies may have stopped doing business with plaintiff, but they would have done so once defendant changed its formula no matter what the advertising explanation for the change was. Comment: This seems more like a proximate cause argument than a materiality argument, but it is certainly an unusual situation.

Defendant counterclaimed for false advertising in plaintiff’s use of “bioequivalent” and “generic equivalent” in its ads. The basic argument: those terms have specific meaning in the industry, derived from their specific meaning established by the FDCA. Any use of those terms necessarily implies that tests have proved such equivalence, but plaintiff never performed tests. Plaintiff’s claims were therefore literally false – or at best misleading, because they induced pharmacists to violate state laws on prescription substitutions.

So we plunge once again into the murky waters dividing the FDA’s jurisdiction from claims actionable under the Lanham Act. A generic prescription drug will only be approved by the FDA if the maker shows therapeutic equivalence – both pharmaceutical equivalence (composition of active ingredients) and bioequivalence (absorption in the body). The FDA publishes approved generic products in the Orange Book; some states only allow pharmacy-based drug substitution when a generic is in the Orange Book, while others require therapeutic equivalence but do not specifically mention the Orange Book. But medical foods are outside the Orange Book regime.

To avoid preemption, a Lanham Act claim must be resolvable without invoking the FDA’s jurisdiction and expertise. A party can use the FDA’s standards to establish falsity as long as no interpretation of those standards is required. So, a claim of bioequivalence is actionable because that claim can be falsified by showing that tests disprove (or fail to prove) it. However, defendant can’t use the mere fact that plaintiff’s product isn’t in the Orange Book to establish falsity.

Defendant argued that a claim of “generic equivalence” requires the same substantiation as listing in the Orange Book: both pharmaceutical and bioequivalence. Here, defendant offered an industry survey showing that pharmacists don’t differentiate prescription dietary foods from prescription drugs. In fact, the parties agreed that pharmacists and doctors are deeply confused about, or altogether ignorant of, the medical foods category – the CEO of plaintiff’s parent company estimated that 95% of them didn’t know Foltx’s category (and he himself misidentified Foltx as a “nutritional supplement,” which is actually a name for a whole different category of products). But the survey didn’t isolate consumers' opinions about the relevant standards for substituting one medical food for another. Plaintiff argued that defendant’s ads led pharmacists to expect that the FDA had approved equivalence – but any claim that FDA approval was required is preempted by the FDCA.

This leaves us with the usual gap between what the FDCA requires and what people believe. People routinely assume that the FDA regulates more, and more vigorously, than it actually does. They are more likely to assume that advertisers wouldn’t be allowed to make untrue or unproved claims when it comes to food and drugs, and thus more vulnerable to deception.

The court pointed out that defendant relied on the FDA’s regulatory gaps in its own business dealings – an ad for Folbalin stated that Red River was the “sole authorized generic licensee” for Foltx, but explicitly stated that there were no FDA requirements for therapeutic equivalence. As a result, the ad continued, plaintiff’s product shouldn’t be considered a generic of Folbalin or Foltx. As the court noted, this fails to explain how Folbalin could be considered generic to Foltx, since there’s no indication it’s been tested for therapeutic equivalence. Red River – “which seemingly is nothing more than [defendant’s] own operation to create a generic” – is using the regulatory loophole for medical foods, “while at the same time--and in the same advertisement--attempting to close that loophole to exclude competitors by suggesting that their products must be rated therapeutically equivalent to be considered generic.”

Okay, so is therapeutic equivalence the proper standard for whether a substance is “generic” for another substance outside the drug regulatory scheme? Yes, at least if defendant can show that pharmacists understand “generic equivalence” to imply therapeutic equivalence. That would mean that the falsity claim was based on market conditions, not violation of FDA regulations. (Though the market is itself responding to expectations created by FDA regulations of pharmaceuticals.)

Relatedly, what kind of claim is “bioequivalent”? The court found that the term was necessarily a “tests prove” claim, inherently implying substantiation. Thus, it could be falsified either by evidence that the products weren’t bioequivalent, or by evidence that plaintiff’s tests didn’t prove bioequivalence. The FDA typically requires in vivo testing for bioequivalence, but of course that doesn’t apply to medical foods because nothing does. Defendant didn’t offer any evidence of the proper testing standards, but plaintiff itself argued that pharmaceutical equivalence could allow pharmacists to presume bioequivalence. And pharmaceutical equivalence was where plaintiff was in big trouble.

As noted above, one of the active ingredients was missing in at least one test of plaintiff's product, thus flunking pharmaceutical equivalence and bringing the whole “bioequivalent”/“generic equivalent” house down, preventing summary judgment.

Plaintiff argued that, regardless, defendant couldn’t show any actual harm, because other distributors of generic versions of Foltx would have captured the lost sales (recall that many states require substitution of a generic where available). But the court refused to grant summary judgment on this point. Unlike products competing through advertising, where harm can often only be circumstantially shown, plaintiff’s product sold because pharmacists substituted it for Foltx, allowing for a very clear picture of damages.

There is a factual dispute about damages if other generic competitors would have filled in the gaps, but that is for a trial to resolve. Given that defendant showed actual injury, it doesn’t have to prove the hypothetical negative about alternative sources of injury.

My blogging policy

As the IP Works in Progress conference approaches, I thought I should say something about my policy on blogging conferences. I treat conferences as open by default, and so I generally plan to share my notes on presentations. Especially when work is in early stages, though, some people are uncomfortable with this. So I won’t post notes if a presenter asks me – or asks everyone, via announcement or word to the organizers – not to do so. I will not publicize any such requests. If I make a mistake, I will edit or delete posts. Because I have a bad memory – which is part of why I take notes – I probably won’t remember that a person opted out by the time the next conference rolls around, so in general I will treat each conference separately.

Works in progress are just that, and should not be judged by the standards applied to finished work. (And people’s relationship to their finished work changes over time, too; there are some things in print I’d never write again.) But we share unfinished works because they’re useful to other people as well as because we can get good suggestions – it's not a one-way street. And if you’re going to the right conferences, a good number of the people whose opinions matter will be able to judge your presentation for themselves.

Regardless, I suspect legal academia is going to have to learn greater formal appreciation for beta versions – the rise of preprint sites like SSRN is a step in that direction. But I have no interest in defying presenters’ preferences.

The law of the goldfish

When I was searching for a good picture to go with the previous post, I came across a commercial photography site offering to license this picture:
From the description: "This is a high definition [picture] of a bunch of generic goldfish crackers laid out on a black background."

Generic? Are you sure?

Review questions: does selling this stock photo infringe Pepperidge Farm's trade dress rights? Dilute them? What about the description of the crackers as "generic" -- does or should a cause of action exist for genericide?

Sample property release form from the Stanford Libraries' fair use site here.

(Post title adapted from The Law of the Horse -- which, by the way, produces an awesome targeted ad result on Google.)

Interview: Larry Weinstein of Proskauer

Larry Weinstein of Proskauer Rose LLP kindly answered my interview questions, which I have edited to add a few links and a picture. Here is his brief biographical statement:

I am a senior intellectual property litigation partner at Proskauer Rose LLP in New York City, and co-chair of Proskauer’s Trademark and False Advertising practice group. I am a 1978 graduate of NYU School of Law, where I was Articles Editor of the NYU Law Review, Order of the Coif and a John Norton Pomeroy scholar. After a judicial clerkship with Judge James Hunter of the U.S. Court of Appeals for the Third Circuit, I began private practice in 1979, and was a partner at two New York City law firms before joining Proskauer Rose in 1999.

Q: How did you get into advertising litigation?

In the late 1980’s, I began doing trademark litigation for SC Johnson & Son, a large consumer products company in Wisconsin. After a few successful cases, they gave me a false advertising case, and then another and another. My work with that client led to false advertising cases with other clients, and by the mid-1990’s, I found myself spending most of my time litigating and counseling clients in the area of false advertising. That has continued to be the case ever since. I find this area of the law fascinating, so much so that I am one of the very few people around who pay close attention to commercials on days other than Super Bowl Sunday.

Q: Tell us about a favorite advertising case (or cases) you litigated.

I don’t really have a favorite case. For whatever reason, my current cases are always my favorites. If I really had to pick one, and this would be a close call, it would be the “Goldfish” false advertising case several years ago in the Southern District of New York and the Second Circuit. In that case, SC Johnson, the manufacturer of ZIPLOC food storage bags, brought a Lanham Act false advertising suit against its archrival Clorox, the maker of GLAD food storage bags, arising out of Clorox advertising featuring a talking Goldfish that portrayed the Ziploc bags as leaking a sieve. SC Johnson did not find the ads the least bit funny. We succeeded in getting the first ad enjoined after trial, and then won summary judgment enjoining a second ad. On appeal, the Second Circuit affirmed. The case ranks high on my list because we defeated a very good adversary, the case involved some fascinating legal issues, including the so-called “necessary implication” doctrine and whether visual images can be literally false, and because the Second Circuit (and other circuit courts) continue to cite that case, which turned out to be an important one in Lanham Act false advertising jurisprudence.

(Picture by colodio.)

Q: What are some hot legal issues in the courts? What emerging trends in advertising law should advertisers be watching?

In the Lanham Act area, there are several. One involves differences among the circuit courts concerning who has standing to sue under the statute. It is clear that consumers do not have standing, but some appellate courts limit standing to direct competitors, and others, including the First and Second Circuits, extend standing to non-competitors that suffered a business injury caused by the false advertising. And recently, the Eleventh Circuit held that a Burger King franchisee that was a direct competitor of McDonald’s lacked standing to sue McDonald’s for false advertising. That decision, which I was not involved in but have written about, was wrongly decided in my view. One of these days, the right case is going to cause the Supreme Court to grant cert. to decide this issue.

Another interesting issue which the courts have not yet fully dealt with involves statistical significance, particularly what statistical results do and do not enable an advertiser to claim parity.

Third, the necessary implication doctrine is being overextended by some courts to find literally false advertisements that are actually quite ambiguous. That is not a good development in Lanham Act law.

Finally, outside of the Lanham Act, there has been a steady proliferation of state law-based consumer class action false advertising suits. This could turn out to be a revolutionary development, and creates all sorts of different risks and costs for advertisers that has begun to affect how corporate legal advisers assess advertising copy.

Q: Courts have imposed a materiality requirement in Lanham Act false advertising cases, and some have even required specific evidence that a false statement is material – e.g., Pizza Hut Inc. v. Papa John's Int'l, 227 F.3d 489 (5th Cir. 2000). Should trademark law take a cue from false advertising law and require some showing of materiality, for example in source/sponsorship cases?

It’s an interesting question, but I wonder whether the absence of a formal materiality requirement in trademark cases is really a significant problem. Source or sponsorship confusion is typically demonstrated by consumer surveys, and where the confusion is reflected in answers to open ended questions, the importance of the confusion to the survey participant’s assessment of the marks in question is often apparent. It is true, I suppose, that this is not the case where the confusion is demonstrated by close-ended questions. However, the biggest problem with judicial reliance on close ended questions in this context is not materiality, but rather the fact that these questions are so leading. In other words, in my opinion, these questions do not provide an accurate reflection of the extent of consumer confusion at all, much less the extent of confusion likely to affect purchasing decisions.

Q: What is your advice for a law student who wants to practice in the field? Given that most schools don’t teach advertising law, what are the best courses to take?

I can answer the first question easily enough; the second question is tougher. Taking the latter first, a trademark or Lanham Act course would be the best substitute for a course on advertising law. Come to think of it, I wouldn’t mind teaching an advertising course if someone out there wants to offer one. As to the first question, the best advice is to find out through the law firm interviewing process which firms regularly practice in this field, and I emphasize the word regularly here. In fact, surprisingly few firms do. Of those few, New York City has the most, with the remainder primarily in D.C. and Chicago. If a student has the chance to interview with those firms, they should be upfront about their interest, and ask how easy it is to get slotted into this area. If any readers would like more detailed information about how to break into the field, they should email me at lweinstein (at) proskauer.com.

From RT: Thanks again to Larry; I hope to continue this as an occasional series, so reader suggestions are welcome!

Wednesday One-Liners Decry Infringement

Two Overheard in the Office posts on copying in one day!

Sweetener wars reinterpreted as feminist history

From Overheard in New York (ignore the crass headline). Clever, and also up-to-date on the news:

Chick #1: Well, I like to think of Equal as the women's lib of sweetener.
Chick #2: So... What does that make Sweet'N Low? The pre-lib? Feminine mystique?
Chick #1: Yeah... Just look at it -- pink and pretty, sweet, and bowed low. C'mon. It's like, 'Hey, ladies, be sweet and pink for your man -- use Sweet'N Low and stay in shape and he'll love you more!' Then there's Equal -- it's blue, it's bold, it demands attention. It says, 'Yeah, we're an artificial sweetener, marketed towards women, but we're equal!'
Chick #2: Um... Okay, so what does that make Splenda?
Chick #1: I guess post-lib feminism?
Chick #2: Uh, I don't even know what that is...
Chick #1: Well, see, Splenda's in court now because apparently neither does anyone else.
Chick #2: Wow... The history of feminism, as interpreted by Deborah, through artificial sweetener...

color names on the Abercrombie spectrum

Kerr Corp. v. Freeman Manufacturing & Supply Co., 2007 WL 2344752 (N.D. Ohio)

Since the late 1970s, defendant Freeman has developed original formulas for wax products used in molding complicated products. Plaintiff Kerr sold Freeman-made color-coded, flake-form injection waxes for jewelry and optics. In 1984, the parties agreed that Freeman would engage in R&D for wax technology projects proposed in writing by Kerr. Over the next twenty years, Freeman improved seven color-coded injection wax products and developed new waxes, including “NYC Pink” injection wax. Though the term “flake” had been used by Freeman and others throughout the industry prior to these developments, Kerr trademarked “Flakes” in 1999.

Freeman began competing with Kerr; both companies claim to own the underlying formulas for various waxes. Kerr sold the colors at issue as Tuffy Green, NYC Pink, and Flex-Plast, while Freeman began marketing those colors as Tuf Guy Green, Filigree Pink, and Flexible Blue. Freeman refers to its colors as “formerly” Tuffy Green, NYC Pink, and Flex-Plast. Freeman sent letters to customers explaining the changed business relationship between itself and Kerr. Freeman also claimed in those letters that, because it no longer makes waxes for Kerr and hasn’t shared its formulas – which are difficult to reverse engineer – current Kerr waxes may not be chemically identical to Freeman/prior Kerr waxes. Still, some customers at trade fairs have continued to ask about the relationship between the two companies.

Kerr sued Freeman for infringement of Kerr’s color-coding scheme, wax color names, the flake form in which certain wax is sold, and the “Flakes” trademark. There were also claims relating to the technology resulting from the R&D agreement, and Freeman’s alleged false advertising of itself as the owner of that technology. (And here is where I would think there’s an obvious bound on Dastar. No one cares who created the technology; that was Freeman, pursuant to an agreement with Kerr. The parties and their customers care about who owns the technology, which is not the same thing at all. In any event, the court found that Freeman owned the technology and thus was not engaging in false advertising.)

The court readily dismissed Kerr’s claim to own its color scheme. Color is functional for investment waxes; some buyers prefer different colors “because they offer greater ‘readability,’ the ability to detect imperfections in wax moldings.” Some customers also prefer darker or lighter waxes, which are associated with color. Kerr’s claims over basic colors like bright red and deep blue would hamper competition. Similarly, use of the flake form of wax is functional as a matter of law. Some buyers prefer flake-form wax for its technical advantages over other waxes.

The color names required different analysis. Interestingly, the court relied on Qualitex, which is about color itself as protectible trade dress, to analyze these color names, starting from the proposition that color is “virtually always descriptive.” Qualitex itself doesn’t say “virtually” but requires secondary meaning all the time – ORANGE brand computers might be arbitrary, but orange-colored computers would still have to show secondary meaning to be protected as a mark. Anyway, the court found the product names “Super Pink,” “Aqua Green,” “Ruby Red,” and “Turquoise” to be merely descriptive and require evidence of “non-functional secondary meaning.”

The court ruled that Kerr’s ads for “Super Pink” and the like aren’t “intended to identify Kerr as the seller, but rather serve the function of identifying the type of wax being sold.” It would be reasonable for both parties to decide to make a new color, say silver, and advertise it as Silver Injection Wax. Buyers would naturally have to ask “whose silver injection wax?” and only other marks – such as “Kerr’s” – could answer that question. Thus, “these color names are prevented from carrying a secondary meaning because they are descriptive, functional elements of the trade dress of the products.”

This is clearly the right result, but the method has a bit of weirdness to it because the ordinary term for what the court is describing is “genericity.” Although genericity (also formerly known as the condition in which a term is the “common descriptive” name of an article) and functionality serve essentially the same purpose, the tests for them differ. When it comes to unregistered trade dress, plaintiffs have the burden of establishing nonfunctionality, whereas a genericity finding usually requires the defendant to submit a substantial amount of evidence. In general, American law fears that plaintiffs overclaim rights in trade dress, often with an anticompetitive result, but sees no such systematic problem with claims to generic terms. A color name is a core generic term for this type of product, but the court didn’t engage in the ordinary steps for evaluating genericity (dictionary definitions, competitors’ uses, etc.).

Kerr had a few color names that weren’t generic. “Tuffy Green” and “NYC Pink” were “partially arbitrary.” The court also said “tuffy” “suggests resiliency,” which makes it suggestive, but also called the terms “fanciful,” so let’s just say it wasn’t all that concerned with the Abercrombie spectrum – the point is, these are inherently distinctive names.

The court thought this case was especially complicated because the underlying green and pink wax products are the same, as opposed to Nike versus Reebok shoes. I think the court meant that the underlying products are commodities, as opposed to items for which tastes might differ, but I’m not sure what makes that a harder case if we don’t care about whether source is material to consumers, as trademark law generally doesn’t. But that consideration, along with Freeman’s use of its house mark on “Tuf Guy Green” and Freeman’s clarifying letters to customers, meant that the issue of likely confusion was for the jury. “NYC Pink” and “Filigree Pink,” however, were too different to cause confusion. (Notes: The court didn’t consider the effect of “formerly” on the analysis, which could lead to confusion about source or sponsorship of the color formerly known as NYC Pink; its general analysis of the effect of Freeman’s clarifications on sophisticated purchasers would apply. Also, Flex-Plast Blue and Flexible Blue dropped out of the analysis somehow; I’m guessing they’re more like the green than the pink and that summary judgment should be denied.)

There was evidence that customers “asked Kerr employees who Freeman was and why it was selling the flake-form and colored waxes Kerr had long sold.” But this was not the type of confusion with which the Lanham Act is concerned. Indeed, this is evidence that consumers recognized a difference between Kerr and Freeman as direct competitors. Freeman used its website and messages to existing customers to explain that its waxes used to be sold under a third party private label (Kerr) but now would be sold exclusively under the Freeman label. This is the kind of explanation that can clarify matters and guard against confusion. Here we face a tradeoff: it may be that some people will be confused by this literally true explanation of the complicated relationship between the parties. But saying nothing, or disclaiming any relationship between the two, would also risk misleadingness, maybe harming a different set of consumers who want the exact wax Kerr used to sell.

Separately, Kerr’s registered trademark “Flakes” was shown to be generic, through industry use and dictionary definitions. The court ordered it cancelled.

It’s pretty clear that the court was not steeped in trademark law. Sometimes this can produce decisions refreshingly free from doctrinal encrustations; sometimes it can produce error. The court’s apparent concern for whether source was material to consumers is probably error, but arguably trademark law would make more sense if it did consider materiality, as false advertising law does.

Cut and paste as literacy

Dan Perkel, Copy and Paste Literacy: Literacy Practices in the Production of a MySpace Profile -- from the abstract:

The expressive power found in the creation of a MySpace profile concerns a technically simple but socially complex practice: the copying and pasting of code as a way to appropriate and reuse other people’s media products. However, the importance of copying and pasting code does not easily fit in the common conventions of reading and writing, consumption and production. By integrating theories of appropriation and reuse of media with theories of literacy, a new way of thinking about this practice emerges, seeing “participation” and “remix” as important concepts to describe the social and technical aspects of these new literacy practices.

I also found danah boyd's essay on MySpace, Facebook, and the class divide to be quite interesting; it is no surprise that I find Facebook much more consistent with my aesthetic and attention patterns than MySpace. (Nor is it particularly surprising that I think danah boyd should capitalize her name.)