Friday, February 11, 2011


Laura A. Heymann, The Law of Reputation and the Interest of the Audience

Running late, so missed the beginning; Heymann discussed various theories behind protection of reputation, including property-based, dignity-based and honor-based. But they miss the relational nature of the interest: audience’s interest in accurate information flows and use of information. Property doesn’t explain why plaintiffs are interested in retractions; infants don’t have honor, though they may have dignity.

Audience interest reminds us of utilitarian functions of reputation: useful signals, as when franchisee uses reputation of national chain to avoid startup costs. Audience participates in creating this value and thus has interest in ensuring its activities are based on solid/robust info and that its use of the info will be beneficial.

Audience focus can also unify disparate areas of doctrine. Helps explain why we exclude truthful statements from defamation, or public figure doctrine in general. Truthful information is useful to the audience (is this always true?); allowing false facts to circulate absent culpable state of mind for public figure because there will be enough responsive info to give the audience what it needs in the end.

How do we recognize the audience in doctrine? Focus courts’ attention on this interest. Perhaps a separate tort, the reputation tort—ambitious/unlikely. Hustler v. Falwell, attempt to get around defamation limits by pleading IIED, but the same First Amendment limits apply. If the interest is really reputational, then it shouldn’t be pled as copyright or right of publicity, but only defamation/TM—those are the causes of action that incorporate audience interest. This would be a good move if it could only gain traction; would need a constitutional hook or a doctrine such as copyright misuse to channel the cases in this way. Post-eBay, the traditional allowance for presumed harm/injunction may influence our perspective on audience interests as well. Courts should look for harm within the relevant audience, not just harm to the particular plaintiff—like the materiality standard for false advertising.

Look also to the nature of the remedy. If the interest is one of accurate flow of information, then disclaimers/retractions will be preferred remedies as opposed to monetary damages.

This all rests on a certain conception of the audience: rational, capable of assessing and responding to information flows. This is normatively attractive but descriptively false. Also: How much our modern communication has changed how we think about reputation flow—hard to assemble the initial audience to correct the record.

Lunney: was Dastar wrongly decided, then?

Heymann: Yes. Consumers care about the intellectual content of the videotape, not the plastic videotape.

Me: why is this concept of the audience normatively attractive?

Heymann: it’s normatively attractive to treat the audience as having the capacity to understand—as with descriptive fair use or parody cases, even though we know there are people out there who won’t get the joke; other interests are more important. Doesn’t mean we allow falsehoods to circulate in any particular case.

Xuan-Thao Nguyen, Apologies as IP Remedies? A Comparative Review of China and the United States Approaches to IP Remedies

Plaintiff often wants an apology instead of a lawsuit. This is not a cultural thing—there are people who attribute the value of apology to Asian/Chinese culture, but look in the US as well. People in US say “I’m sorry” all the time and teach it to our children. Judges have ordered apologies, including in ads and on YouTube. Legal scholarship has looked at apology in Japan in the US, suggesting that apologies can be better used in law. Mediation, conflict resolution; scholarship also in critical race theory, particularly in relation to reparations. Formal apology to Japanese American survivors of US internment. More valuable to some victims than money is. Money can’t heal communities.

Evidence scholarship covers this too.

Chinese reaction: Apology is very American! (Just as Americans said apology was Asian.)

Remedies: injunction, compensatory damages, statutory damages of up to 500,000 RMB, defendant’s profits; reasonable costs; and court-ordered apology is explicitly available as statutory remedy. But what about the case law?

Things in China are changing very fast. Court ordered apologies have been part of remedies: TM defendant to make a public apology within 10 days after judgment. Must be published in Kunming Daily Newspaper (where the offense occurred) “to eliminate the bad effect of infringement.” Another TM case, apology requested but denied. No intentional use of the TM; no bad faith—injunction ordered but no damages or public apology.

Copyright case, infringement of software, large award of damages and costs: public apology ordered in Computer World, the trade press for software. Another case: photojournalist plaintiff whose photo of a festival was published in Nantong Daily, his employer’s newspaper. Defendant publishing house published books containing the photo without permission. Asserted “textbook” or “teaching book” exemption, but the court found that the types of books at issue were not textbooks/teaching books. Remedy: injunctions, damages for economic loss (not very high), public apology within 15 days, content approved by court. If defendants fail to do so, plaintiff will publish apology in Nantong Daily in name of defendants and defendants will pay the expenses. “Sorry for using”—not legal terminology.

Why is apology important? It’s like punitive damages: it’s shameful to have an apology printed in the newspaper. But it also creates the conditions for forgiveness: restorative aspects.

Supreme Court patent case: overturned apology remedy—apologies should be related to plaintiff’s personal interest or commercial credit standing; patents are largely property interests. Not appropriate unless plaintiff proved that the defendant’s conduct caused heavy losses to the plaintiff’s commercial credit standing. Note that in the patent statute there is no specific provision for apologies! But the court still was willing to allow it.

Lessons for US? US cases recognize effects of apology, could do more.

Heymann: Private v. public apology—medical malpractice cases seem to involve private apologies. How important is it that the public know the identity of the defendant? If it’s a small infringer no one’s ever heard of, who cares?

A: With malpractice, there is an interest in settling through apologies; less important that it be public. China: if the conduct is intentional, then the public apology is warranted. If we did that, private apology wouldn’t be satisfactory; would worry about sincerity of “I’m sorry,” whereas publishing it in a newspaper has much more impact.

Mary LaFrance: UK statute—if defendant offers to make amends, with retraction, automatically lowers damage awards even if offer isn’t accepted.

Nguyen: demand for apology is routine in China, but only granted for willful etc.; plaintiffs will routinely send out a press release when they’ve obtained an apology.

Sandra L. Rierson, The Moral Right of Dilution

Not an advocate, but seeking to provide a better diagnosis of why we have dilution and how that might affect remedies. Reports of dilution’s death have been greatly exaggerated: Visa Int’l v. JSL Corp. (9th Cir. 2010) found dilution even though the term was a standard word with a dictionary meaning relevant to defendant’s business; Starbucks v. Wolfe’s Borough Coffee (2d Cir. 2009)—minimal similarity wasn’t enough to defeat dilution claim; intent to associate with Starbucks should have been weighed more heavily even if there was no bad faith. Last week’s Levi Strauss v. Abercrombie & Fitch (9th Cir. 2011)—district court put too much emphasis on the fact that the two trade dresses didn’t look a lot alike; that’s just one factor to be weighed. Victoria’s Secret v. Moseley (6th Cir. 2010)—if there was a semantic association, and the new mark has a lewd or offensive-to-some sexual association, that raises a strong inference of tarnishment.

Current statute has real possibility of damages (and profits and fees) if defendant willfully intended to trade on the recognition of the famous mark or willfully intended to harm the reputation of the famous mark. Recent case: Mattel defending See ‘n Say mark; defendant lost a jury trial on TM infringement/dilution and jury awarded $400,000; judge increased the award and found an exceptional case, awarding $2.6 million in attorneys’ fees. Real risks to small defendants. It’s not easy to get summary judgment on a federal dilution claim for a defendant. So it’s a powerful weapon for TM holders with a strong impact on others’ behavior.

Dilution is supposed to be directed at an economic harm: the distinctiveness of the mark/its source identification function. There are some problems with that though, if people are perfectly capable of distinguishing meanings. If that’s not a satisfactory explanation, why do we have laws prohibiting TM dilution?

Interest groups: Big TM owners make claims to have Congress change the statute, and only the ACLU opposes them; not like patents where there are strong groups on both sides. But why do these TM owners want dilution protection to begin with? Steamrolling little guys still costs some money and may give you a reputation as a bully.

Her explanation: what we’ve done is to extend a moral right to the holders of famous TMs. But why do we do this when the US is so stingy with moral rights generally?

First, we don’t admit that this is what we’re doing. We pretend that there’s harm. Fair use in copyright blocks a lot of moral rights; fair use in TM does not, though fair use is specifically set out as a defense in the TDRA. Moral rights in copyright bump up against rights of owners of objects/copyrights to do what they want with them. Dilution though is squarely in line with US notions of property rights. There’s no transfer of ownership between Victoria’s Secret and Victor Moseley.

Also consistent with an anti-free-riding impulse in US law.

Implications: maybe we don’t need dilution at all. Owners are already protected under other laws. Given the power of modern TM infringement, Kodak pianos/Harry Potter drycleaners would be found infringing. To the extent reputation is at issue, we have state law torts to protect those interests. It’s surprising to see the difference between defamation and dilution a la Victoria’s Secret, where the presumption is one of harm and the burden is basically on the defendants to disprove it. We have a club to swat a fly.

If we accept that dilution is here to stay as a cause of action, we could focus on the question of remedies. She tells students not to expect damages in a TM case, but the possibility is there. Given what dilution is, we should take a look at reducing or changing the scope of remedies available—disclaimer designed to mitigate reputational impact or association. Injunctive relief is also misplaced in these cases without a showing of harm to the plaintiff. Indirect comparison, as in the Charbucks case—admitted indirect reference to Starbucks’ dark roasted coffee—also deserves our consideration.

Glynn Lunney: we can never know whether these defendants caused any harm. Maybe dilution is there for when there’s no justification for the defendant picking a similar name and they could have picked something else; if there’s a risk of harm, why not at least enjoin them?

If you go with moral rights, why doesn’t Levi Strauss come out the other way? For moral rights, wouldn’t you want a high standard of similarity? If the theory is that you’re impugning the integrity of the original, shouldn’t it be clearly associated with the original?

(Stacey Dogan agrees, but the moral right here is not so much a dignity interest as it is a right of publicity. It’s a control over ways in which reputation is used as opposed to control of reputation. And maybe there is evocation of the reputation even without much similarity. My note: wow, this just sounds worse and worse as we spin it out.)

A: The harm of injunctive relief when the plaintiff can’t prove actual harm, which is a given in dilution cases, is that it imposes a burden on the defendant that is in contrast to traditional civil litigation; potential harm to competition when people can’t use identifiers that have referents to a famous TM; also a free speech interest, especially with famous TMs. There is a cost to taking words out of the language, even in a commercial context.

There is a parallel to the right of publicity.

Q: how can corporations have dignity interests in a meaningful philosophical sense?

Silbey: no one wants to admit that this is exactly what’s going on in the corporate speech context.

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